Recommendations for Implementing the Strategic Initiative INDUSTRIE 4.0 Final Report of the Industrie 4.0 Working Group

Securing the future of German manufacturing industry Recommendations for implementing the strategic initiative INDUSTRIE 4.0 Final report of the Industrie 4.0 Working Group

April 2013 Imprint

Authors Contact details / Marketing Communication Promoters Group of the Industry-Science Office of the Industry-Science Research Alliance Research Alliance: beim Stifterverband für die Deutsche Wissenschaft Prof. Dr. Henning Kagermann Ulrike Findeklee, M.A. National Academy of Science and Engineering [email protected] (Spokesperson of the Promoters Group) forschungsunion.de Prof. Dr. Wolfgang Wahlster German Research Center for Artificial Intelligence Secretariat of the Platform Industrie 4.0 Dr. Johannes Helbig Lyoner Straße 9 Deutsche Post AG 60528 Frankfurt/Main [email protected] acatech – National Academy of Science and Engineering plattform-i40.de

Editorial staff Ariane Hellinger, M.A. Veronika Stumpf, M.A. With the assistance of: Christian Kobsda, B.A. acatech – National Academy of Science and Engineering Publication date: April 2013

Copy editing Linda Treugut, M.A. acatech – National Academy of Science and Engineering

English translation Joaquín Blasco Dr. Helen Galloway

Layout and typesetting

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Contents Contents

Executive summary ...... 04

Working group members | Authors | Technical experts ...... 08

1 Introduction ...... 12

2 The vision: Industrie 4.0 as part of a smart, networked world ...... 18 2.1 Shaping the vision of Industrie 4.0 ...... 19 2.2 What will the future look like under Industrie 4.0? ...... 20 2.3 Novel business opportunities and models ...... 22 2.4 New social infrastructures in the workplace ...... 23 2.5 Novel service-based, real-time enabled CPS platforms ...... 24 2.6 The road to Industrie 4.0 ...... 25

Example application 1 Reducing the energy consumed by a vehicle body assembly line while it is not in use ...... 27

3 The dual strategy: becoming a leading market and supplier ...... 28 3.1 Leading supplier strategy ...... 29 3.2 Leading market strategy ...... 29 3.3 The dual strategy and its key features ...... 30

Example application 2 End-to-end system engineering across the entire value chain ...... 33

4 Research requirements ...... 34

5 Priority areas for action ...... 38 5.1 Standardisation and open standards for a reference architecture ...... 39 5.2 Managing complex systems ...... 42 5.3 Delivering a comprehensive broadband infrastructure for industry ...... 45 5.4 Safety and security as critical factors for the success of Industrie 4.0 ...... 46 5.5 Work organisation and work design in the digital industrial age ...... 52 5.6 Training and continuing professional development for Industrie 4.0 ...... 55 5.7 Regulatory framework ...... 58 5.8 Resource efficiency ...... 62

Example application 3 Supporting custom manufacturing: an example of how an individual customer’s requirements can be met ...... 64

2 Industrie 4.0 Contents Contents Example application 4 Telepresence ...... 65

6 How does Germany compare with the rest of the world? ...... 66

Example application 5 Sudden change of supplier during production due to a crisis beyond the manufacturer’s control ...... 73

7 Outlook ...... 74

Background: The strategic initiative Industrie 4.0 ...... 76

Industrie 4.0 3 Executive summary Executive summary Executive summary

Germany has one of the most competitive manufac- enable and require end-to-end engineering across the turing industries in the world and is a global leader in entire value chain. the manufacturing equipment sector. This is in no small measure due to Germany’s specialisation in re- Industrie 4.0 holds huge potential. Smart factories allow search, development and production of innovative individual customer requirements to be met and mean manufacturing technologies and the management of that even one-off items can be manufactured profitably. complex industrial processes. Germany’s strong ma- In Industrie 4.0, dynamic business and engineering chinery and plant manufacturing industry, its globally processes enable last-minute changes to production significant level of IT competences and its know-how and deliver the ability to respond flexibly to disruptions in embedded systems and automation engineering and failures on behalf of suppliers, for example. End-to- mean that it is extremely well placed to develop its end transparency is provided over the manufacturing position as a leader in the manufacturing engineering process, facilitating optimised decision-making. In- industry. Germany is thus uniquely positioned to tap dustrie 4.0 will also result in new ways of creating val- into the potential of a new type of industrialisation: ue and novel business models. In particular, it will pro- Industrie 4.0. vide start-ups and small businesses with the opportunity to develop and provide downstream services. The first three industrial revolutions came about as a result of mechanisation, electricity and IT. Now, the in- In addition, Industrie 4.0 will address and solve some troduction of the Internet of Things and Services into of the challenges facing the world today such as the manufacturing environment is ushering in a fourth resource and energy efficiency, urban production and industrial revolution. In the future, businesses will es- demographic change. Industrie 4.0 enables continu- tablish global networks that incorporate their machin- ous resource productivity and efficiency gains to be ery, warehousing systems and production facilities in delivered across the entire value network. It allows the shape of Cyber-Physical Systems (CPS). In the work to be organised in a way that takes demograph- manufacturing environment, these Cyber-Physical ic change and social factors into account. Smart as- Systems comprise smart machines, storage systems sistance systems release workers from having to per- and production facilities capable of autonomously ex- form routine tasks, enabling them to focus on creative, changing information, triggering actions and control- value-added activities. In view of the impending short- ling each other independently. This facilitates funda- age of skilled workers, this will allow older workers to mental improvements to the industrial processes extend their working lives and remain productive for involved in manufacturing, engineering, material us- longer. Flexible work organisation will enable workers age and supply chain and life cycle management. The to combine their work, private lives and continuing smart factories that are already beginning to appear professional development more effectively, promoting employ a completely new approach to production. a better work-life balance. Smart products are uniquely identifiable, may be located at all times and know their own history, current Global competition in the manufacturing engineering status and alternative routes to achieving their target sector is becoming fiercer and fiercer and Germany is state. The embedded manufacturing systems are ver- not the only country to have recognised the trend to de- tically networked with business processes within fac- ploy the Internet of Things and Services in manufacturing tories and enterprises and horizontally connected to industry. Moreover, it is not just competitors in Asia that dispersed value networks that can be managed in real pose a threat to German industry – the US is also taking time – from the moment an order is placed right measures to combat deindustrialisation through pro- through to outbound logistics. In addition, they both grammes to promote “advanced manufacturing”.

Industrie 4.0 5 Executive summary In order to bring about the shift from industrial produc- • Managing complex systems: Products and tion to Industrie 4.0, Germany needs to adopt a dual manufacturing systems are becoming more and strategy. Germany’s manufacturing equipment indus- more complex. Appropriate planning and explana- try should seek to maintain its global market leadership tory models can provide a basis for managing this by consistently integrating information and communica- growing complexity. Engineers should therefore be tion technology into its traditional high-tech strategies equipped with the methods and tools required to so that it can become the leading supplier of smart develop such models. manufacturing technologies. At the same time, it will be • A comprehensive broadband infrastructure for necessary to create and serve new leading markets for industry: Reliable, comprehensive and high-quality CPS technologies and products. In order to deliver the communication networks are a key requirement for goals of this dual CPS strategy, the following features Industrie 4.0. Broadband Internet infrastructure of Industrie 4.0 should be implemented: therefore needs to be expanded on a massive scale, both within Germany and between Germany • Horizontal integration through value networks and its partner countries. • End-to-end digital integration of engineering • Safety and security: Safety and security are both across the entire value chain critical to the success of smart manufacturing • Vertical integration and networked manufactur- systems. It is important to ensure that production ing systems facilities and the products themselves do not pose a danger either to people or to the environment. At The journey towards Industrie 4.0 will require Germany the same time, both production facilities and to put a huge amount of effort into research and devel- products and in particular the data and information opment. In order to implement the dual strategy, re- they contain – need to be protected against search is required into the horizontal and vertical inte- misuse and unauthorised access. This will require, gration of manufacturing systems and end-to-end for example, the deployment of integrated safety integration of engineering. In addition, attention should and security architectures and unique identifiers, be paid to the new social infrastructures in the work- together with the relevant enhancements to place that will come about as a result of Industrie 4.0 training and continuing professional development systems, as well as the continued development of CPS content. technologies. • Work organisation and design: In smart factories, the role of employees will change significantly. If Industrie 4.0 is to be successfully implemented, re- Increasingly real-time oriented control will transform search and development activities will need to be ac- work content, work processes and the working companied by the appropriate industrial and industrial environment. Implementation of a socio-technical policy decisions. The Industrie 4.0 Working Group be- approach to work organisation will offer workers the lieves that action is needed in the following eight key opportunity to enjoy greater responsibility and areas: enhance their personal development. For this to be possible, it will be necessary to deploy participative • Standardisation and reference architecture: work design and lifelong learning measures and to Industrie 4.0 will involve networking and integration launch model reference projects. of several different companies through value • Training and continuing professional develop- networks. This collaborative partnership will only be ment: Industrie 4.0 will radically transform workers’ possible if a single set of common standards is job and competence profiles. It will therefore be developed. A reference architecture will be needed necessary to implement appropriate training to provide a technical description of these stand- strategies and to organise work in a way that ards and facilitate their implementation. fosters learning, enabling lifelong learning and

6 Industrie 4.0 Executive summary workplace-based CPD. In order to achieve this, • Resource efficiency: Quite apart from the high model projects and “best practice networks” should costs, manufacturing industry’s consumption of be promoted and digital learning techniques should large amounts of raw materials and energy also be investigated. poses a number of threats to the environment and security of supply. Industrie 4.0 will deliver gains in • Regulatory framework: Whilst the new manufac- resource productivity and efficiency. It will be turing processes and horizontal business networks necessary to calculate the trade-offs between the found in Industrie 4.0 will need to comply with the additional resources that will need to be invested in law, existing legislation will also need to be smart factories and the potential savings generated. adapted to take account of new innovations. The challenges include the protection of corporate The journey towards Industrie 4.0 will be an evolution- data, liability issues, handling of personal data and ary process. Current basic technologies and experi- trade restrictions. This will require not only legisla- ence will have to be adapted to the specific require- tion but also other types of action on behalf of ments of manufacturing engineering and innovative businesses – an extensive range of suitable solutions for new locations and new markets will have instruments exists, including guidelines, model to be explored. If this is done successfully, Industrie 4.0 contracts and company agreements or self-regula- will allow Germany to increase its global competitive- tion initiatives such as audits. ness and preserve its domestic manufacturing industry.

Industrie 4.0 7 Working group members Authors Technical experts

Authors and experts Working group members | Authors Technical experts

Co-chairs Dr. Siegfried Dais, Robert Bosch GmbH Prof. Dr. Manfred Broy, TU München Prof. Dr. Henning Kagermann, acatech Prof. Dr. Werner Damm, Universität Oldenburg / Offis Prof. Dr. Jürgen Gausemeier, Universität Paderborn WG spokespersons Prof. Dr. Otthein Herzog, Jacobs University Bremen WG 1 – The Smart Factory Prof. Dr. Fritz Klocke, RWTH Aachen / WZL Dr. Manfred Wittenstein, WITTENSTEIN AG Prof. Dr. Gunther Reinhart, TU München Prof. Dr. Bernd Scholz-Reiter, BIBA WG 2 – The Real Environment Prof. Dr. Siegfried Russwurm, Siemens AG Industry-Science Research Alliance and professional associations WG 3 – The Economic Environment Dr. Bernhard Diegner, ZVEI (German Electrical and Dr. Stephan Fischer, SAP AG Electronic Manufacturers’ Association) Rainer Glatz, VDMA (German Engineering Federation) WG 4 – Human Beings and Work Prof. Dieter Kempf, BITKOM (Federal Association for Prof. Dr. Wolfgang Wahlster, DFKI Information Technology, Telecommunications and New (German Research Center for Artificial Intelligence) Media) Prof. Dr. Gisela Lanza, WBK, KIT (Institute of WG 5 – The Technology Factor Production Science, Karlsruhe Institute of Technology) Dr. Heinz Derenbach, Bosch Software Innovations Dr. Karsten Ottenberg, Giesecke & Devrient GmbH GmbH Prof. Dr. August Wilhelm Scheer, Scheer Group Dieter Schweer, BDI (Federation of German Members from industry Industries) Dr. Reinhold Achatz, ThyssenKrupp AG Ingrid Sehrbrock, DGB (Confederation of German Dr. Heinrich Arnold, Deutsche Telekom AG Trade Unions) Dr. Klaus Dräger, BMW AG Prof. Dr. Dieter Spath, Fraunhofer IAO Dr. Johannes Helbig, Deutsche Post DHL AG Prof. Dr. Ursula M. Staudinger, Jacobs University Dr. Wolfram Jost, Software AG Bremen Dr. Peter Leibinger, TRUMPF GmbH & Co. KG Dr. Reinhard Ploss, Infineon Technologies AG Volker Smid, Hewlett-Packard GmbH Guests Dr. Thomas Weber, Daimler AG Dr. Andreas Goerdeler, BMWi (Federal Ministry of Dr. Eberhard Veit, Festo AG & Co. KG Economics and Technology) Dr. Christian Zeidler, ABB Ltd. Prof. Dr. Wolf-Dieter Lukas, BMBF (Federal Ministry of Education and Research) Academic members Ingo Ruhmann, BMBF (Federal Ministry of Education Prof. Dr. Reiner Anderl, TU Darmstadt and Research) Prof. Dr. Thomas Bauernhansl, Fraunhofer-Institute for Dr. Alexander Tettenborn, BMWi (Federal Ministry of Manufacturing Engineering and Automation Economics and Technology) Prof. Dr. Michael Beigl, Karlsruhe Institute of Technol- Dr. Clemens Zielonka, BMBF (Federal Ministry of ogy (KIT) Education and Research)

Industrie 4.0 9 Authors and experts Authors – core team Chapter 5.4 Safety and security Klaus Bauer, Trumpf Werkzeugmaschinen Matthias Brucke, OFFIS Institute for Information GmbH & Co. KG Technology Dr. Bernhard Diegner, ZVEI (German Electrical and Jürgen Niehaus, SafeTRANS – Safety in Electronic Manufacturers’ Association) Transportation Systems Johannes Diemer, Hewlett-Packard GmbH Wolfgang Dorst, BITKOM (Federal Association for Chapter 5.7 Regulatory framework Information Technology, Telecommunications and New Prof. Dr. Gerrit Hornung, Universität Passau Media) Kai Hofmann, Universität Passau Dr. Stefan Ferber, Bosch Software Innovations GmbH Additional authors from the Working Groups Rainer Glatz, VDMA (German Engineering Federation) Vinay Aggarwal, Deutsche Telekom AG Ariane Hellinger, acatech Mathias Anbuhl, DGB (Confederation of German Dr. Werner Herfs, RWTH Aachen / WZL Trade Unions) Marion Horstmann, Siemens AG Dr. Dietmar Dengler, DFKI (German Research Center Dr. Thomas Kaufmann, Infineon Technologies AG for Artificial Intelligence) Dr. Constanze Kurz, IG Metall Ulrich Doll, Homag Holzbearbeitungssysteme GmbH Dr. Ulrich Löwen, Siemens AG Dr. Gerhard Hammann, TRUMPF Veronika Stumpf, acatech Werkzeugmaschinen GmbH + Co. KG Andreas Haubelt, TRUMPF Werkzeugmaschinen Co-authors GmbH + Co. KG Dr. Kurt D. Bettenhausen, Siemens AG Dirk Hilgenberg, BMW AG Dr. Kerstin Geiger, SAP AG Bernd Kärcher, Festo AG & Co.KG Jörg Heuer, Telekom AG Dr. Alassane Ndiaye, DFKI (German Research Dr. Günter Hörcher, Fraunhofer-Institut IPA Center for Artificial Intelligence) Petra Köpfer-Behncke, SAP AG Dr. Detlef Pauly, Siemens AG Jörn Lehmann, VDMA (German Engineering Tobias Philipp, IWB Federation) Dr. Heinz-Jürgen Prokop, TRUMPF Dr. Katja Patzwaldt, Jacobs University Bremen Werkzeugmaschinen GmbH & Co. KG Steven Peters, WBK, KIT Michael Wetzel, Daimler AG Dr. Harald Schöning, Software AG Joachim Seidelmann, Fraunhofer Institute for Manufacturing Engineering and Automation Prof. Dr. Ursula M. Staudinger, Jacobs University Bremen

10 Industrie 4.0 Authors and experts We would like to thank the participants in the following technical expert workshops

„Safety and security“ workshop held on 18 January 2013 Dr. Alexander Walsch, General Electric Deutschland in Frankfurt am Main for their input into chapter 5.4 Holding GmbH Marc Wiesner, VDMA Klaus Bauer, TRUMPF Werkzeugmaschinen Oliver Winzenried, WIBU-SYSTEMS AG GmbH&Co. KG Steffen Zimmermann, VDMA Christoph Bier, Fraunhofer Institute of Optronics, System Technologies and Image Exploitation Slavtcho Bonev, Epyxs GmbH „Regulatory framework“ workshop held on 28 January Willem Bulthuis, secunet Security Networks AG 2013 in Berlin for their input into chapter 5.7 Stefan Ditting, HIMA Paul Hildebrandt GmbH & Co. KG Till Barleben, ZVEI Wolfgang Dorst, BITKOM (Federal Association for Klaus Bauer, TRUMPF Werkzeugmaschinen GmbH Information Technology, Telecommunications and New & Co. KG Media) Dr. Georg Böttcher, Siemens AG Armin Glaser, Pilz GmbH & Co. KG Alfons Botthof, VDI/VDE Innovation + Technik GmbH Rainer Glatz, VDMA (German Engineering Susanne Dehmel, BITKOM Federation) Johannes Diemer, Hewlett-Packard GmbH Stephan Gurke, ZVEI (German Electrical and Kai Hofmann, Universität Passau Electronic Manufacturers’ Association) Prof. Dr. Gerrit Hornung, Universität Passau Dr. Magnus Harlander, GeNUA Gesellschaft für Sven Hötitzsch, Universität Würzburg Netzwerk und Unix-Administration mbH Lars Kripko, BITKOM Dr. Thorsten Henkel, Fraunhofer SIT Dr. Reinold Mittag, IG Metall Dr. Detlef Houdeau, Infineon Technologies AG Christian Patschke, DLR Dr. Lutz Jänicke, Dr. Mario Rehse, BITKOM Innominate Security Technologies AG Natalie Swann, Hewlett-Packard GmbH Hartmut Kaiser, secunet Security Networks AG Marc Wiesner, VDMA Johannes Kalhoff, Phoenix Contact GmbH & Co.KG Prof. Dr. Frithjof Klasen, Fachhochschule Köln, Institut für Automation & Industrial IT Dr. Wolfgang Klasen, Siemens AG Jörn Lehmann, VDMA Jens Mehrfeld, BSI Sebastian Rohr, accessec GmbH Martin Schwibach, BASF SE Hansjörg Sperling-Wohlgemuth, Pilz GmbH & Co. KG Dr. Walter Speth, Bayer Technology Services GmbH Dr. Martin Steinebach, Fraunhofer SIT Winfried Stephan, T-Systems International GmbH Carolin Theobald, ZVEI Benjamin Törl, Epyxs GmbH Dr. Martin Vetter, TÜV Süd AG Michael Vöth, Robert Bosch GmbH

Industrie 4.0 11 1 Introduction Introduction

1 1 Introduction

Securing the future of German manufacturing industry Powerful, autonomous microcomputers (embedded Germany has one of the most competitive manufactur- systems) are increasingly being wirelessly networked ing industries in the world. This is due to its ability to with each other and with the Internet. This is resulting in manage complex industrial processes where different the convergence of the physical world and the virtual tasks are performed by different partners in different world (cyberspace) in the form of Cyber-Physical Sys- geographical locations. It has been successfully em- tems (CPS). Following the introduction of the new In- ploying information and communication technology ternet protocol IPv62 in 2012, there are now sufficient (ICT) to do this for several decades – today, approxi- addresses available to enable universal direct network- mately 90 percent of all industrial manufacturing pro- ing of smart objects via the Internet. cesses are already supported by ICT. Over the past 30 This means that for the first time ever it is now possible years or so, the IT revolution has brought about a radical to network resources, information, objects and people transformation of the world in which we live and work, to create the Internet of Things and Services. The ef- with an impact comparable to that of mechanisation and fects of this phenomenon will also be felt by industry. electricity in the first and second Industrial Revolutions.1 In the realm of manufacturing, this technological evolu- The evolution of PCs into smart devices has been action can be described as the fourth stage of industriali- companied by a trend for more and more IT infrastruc- sation, or Industrie 4.03 (Fig. 1). ture and services to be provided through smart net- Industrialisation began with the introduction of me- works (cloud computing). In conjunction with ever chanical manufacturing equipment at the end of the greater miniaturisation and the unstoppable march of 18th century, when machines like the mechanical loom the Internet, this trend is ushering in a world where revolutionised the way goods were made. This first in- ubiquitous computing is becoming a reality. dustrial revolution was followed by a second one that

Figure 1: The four stages of the Industrial Revolution

First programmable logic controller 4. industrial revolution (PLC), Modicon 084 based on Cyber-Physical 1969 Systemss 3. industrial revolution uses electronics and IT to First production line, achieve further automation Cincinnati slaughterhouses of manufacturing

1870 y 2. industrial revolution

follows introduction of complexit electrically-powered mass First mechanical loom production based on the 1784 division of labour 1. industrial revolution follows introduction of water- and steam-powered mechanical manufacturing facilities time End of Start of Start of 1970s today 18th century 20th century Source: DFKI 2011

Industrie 4.0 13 Introduction

1 began around the turn of the 20th century and involved Using the Internet of Things and Services electrically-powered mass production of goods based in manufacturing on the division of labour. This was in turn superseded The Internet of Things and Services makes it possible by the third industrial revolution that started during the to create networks incorporating the entire manufactur- early 1970s and has continued right up to the present ing process that convert factories into a smart environ- day. This third revolution employed electronics and in- ment. Cyber-Physical Production Systems comprise formation technology (IT) to achieve increased auto- smart machines, warehousing systems and production mation of manufacturing processes, as machines took facilities that have been developed digitally and feature over not only a substantial proportion of the “manual end-to-end ICT-based integration, from inbound logis- labour” but also some of the “brainwork”. tics to production, marketing, outbound logistics and Germany needs to draw on its strengths as the world’s service. This not only allows production to be config- leading manufacturing equipment supplier and in the ured more flexibly but also taps into the opportunities field of embedded systems by harnessing the spread offered by much more differentiated management and of the Internet of Things and Services into the manu- control processes. facturing environment so that it can lead the way to- In addition to optimising existing IT-based processes, wards the fourth stage of industrialisation. Industrie 4.0 will therefore also unlock the potential of Rolling out Industrie 4.0 will not only strengthen Ger- even more differentiated tracking of both detailed pro- many’s competitive position but also drive solutions to cesses and overall effects at a global scale6 which it both global challenges (e.g. resource and energy effi- was previously impossible to record. It will also involve ciency) and national challenges (e.g. managing demo- closer cooperation between business partners (e.g. graphic change). However, it is crucial to consider suppliers and customers) and between employees, technological innovations within their sociocultural providing new opportunities for mutual benefit.7 context4, since cultural and social changes are also major drivers of innovation in their own right. Demo- As the world’s leading manufacturing equipment sup- graphic change, for example, has the potential to plier, Germany is uniquely well placed to tap into the transform all the key areas of our society, such as the potential of this new form of industrialisation.8 Germa- way that learning is organised, the nature of work and ny’s global market leaders include numerous “hidden health as people live longer lives and the infrastruc- champions” who provide specialised solutions – 22 of ture of local communities. This will in turn have signifi- Germany’s top 100 small and medium-sized enterpris- cant implications for Germany’s productivity. By opti- es (SMEs) are machinery and plant manufacturers, with mising the relationship between technological and three of them featuring in the top ten.9 Indeed, many social innovation processes, we will be making an im- leading figures in the machinery and plant manufactur- portant contribution to the competitiveness and pro- ing industry consider their main competitors to be do- ductivity of the German economy.5 mestic ones.10 Machinery and plant also rank as one of Germany’s main exports alongside cars and chemi- cals.11 Moreover, German machinery and plant manufacturers expect to maintain their leadership position in

The Internet of Things and Services is coming to the manufacturing environment: In essence, Industrie 4.0 will involve the technical integration of CPS into manufacturing and logistics and the use of the Internet of Things and Services in industrial processes. This will have implications for value creation, business models, downstream services and work organisation.

14 Industrie 4.0 Introduction

1 » Industrie 4.0 offers Germany the chance to further strengthen its position as a manufacturing location, manufacturing equipment supplier and IT business solutions supplier. It is encouraging to see that all the stakeholders in Ger- many are now working closely together through the Industrie 4.0 Platform in order to move ahead with implementation. « Prof. Dr. Henning Kagermann acatech – National Academy of Science and Engineering Spokesperson of the Communication Promoters Group of the Industry-Science Research Alliance and Co-Chair of the Industrie 4.0 Working Group

the future. 60% of them believe that their technological On the initiative of the Industry-Science Research Alli- competitive advantage will increase over the next five ance, the partners in the Industrie 4.0 Platform have years, while just under 40% hope to maintain their cur- therefore set themselves the goal of implementing the rent position.12 Nonetheless, global competition in the German government’s strategic initiative to secure the manufacturing engineering sector is becoming fiercer competitiveness of German industry.13 and fiercer. And it is not just competitors in Asia that pose a threat to German industry – the US is also taking measures to combat deindustrialisation through The Industrie 4.0 initiative has huge potential: programmes to promote “advanced manufacturing”. Furthermore, manufacturing is becoming more dynamic • Meeting individual customer requirements and complex all the time. For example, advances in la- Industrie 4.0 allows individual, customer-specific ser sintering technology mean that it is now possible to criteria to be included in the design, configuration, “print” complex 3D structures to a high quality standard ordering, planning, manufacture and operation within a matter of hours. This is resulting in the emer- phases and enables last-minute changes to be gence of completely new business models and servic- incorporated. In Industrie 4.0 it is possible to es where the end customer is much more closely in- manufacture one-off items and have very low volved – customers can create their own designs and production volumes (batch size of 1) whilst still e-mail them to a “copyshop”, or they can have objects making a profit. scanned and “copied”.

Industrie 4.0 15 Introduction

1 • Flexibility • Responding to demographic change in the CPS-based ad hoc networking enables dynamic workplace configuration of different aspects of business In conjunction with work organisation and compe- processes, such as quality, time, risk, robustness, tency development initiatives, interactive collabora- price and eco-friendliness. This facilitates continuous tion between human beings and technological “trimming” of materials and supply chains. It also systems will provide businesses with new ways of means that engineering processes can be made turning demographic change to their advantage. In more agile, manufacturing processes can be the face of the shortage of skilled labour and the changed, temporary shortages (e.g. due to supply growing diversity of the workforce (in terms of age, issues) can be compensated for and huge increases gender and cultural background), Industrie 4.0 will in output can be achieved in a short space of time. enable diverse and flexible career paths that will • Optimised decision-taking allow people to keep working and remain produc- In order to succeed in a global market, it is becom- tive for longer. ing critical to be able to take the right decisions, • Work-Life-Balance often at very short notice. Industrie 4.0 provides The more flexible work organisation models of end-to-end transparency in real time, allowing early companies that use CPS mean that they are well verification of design decisions in the sphere of placed to meet the growing need of employees to engineering and both more flexible responses to strike a better balance between their work and their disruption and global optimisation across all of a private lives and also between personal develop- company’s sites in the sphere of production. ment and continuing professional development. • Resource productivity and efficiency Smart assistance systems, for example, will provide The overarching strategic goals for industrial new opportunities to organise work in a way that manufacturing processes still apply to Industrie 4.0: delivers a new standard of flexibility to meet delivering the highest possible output of products companies’ requirements and the personal needs from a given volume of resources (resource produc- of employees. As the size of the workforce declines, tivity) and using the lowest possible amount of this will give CPS companies a clear advantage resources to deliver a particular output (resource when it comes to recruiting the best employees. efficiency). CPS allows manufacturing processes to • A high-wage economy that is still competitive be optimised on a case-by-case basis across the Industrie 4.0’s dual strategy will allow Germany to entire value network. Moreover, rather than having develop its position as a leading supplier and also to stop production, systems can be continuously become the leading market for Industrie 4.0 optimised during production in terms of their solutions. resource and energy consumption or reducing their emissions.14 However, Industrie 4.0 will not pose an exclusively • Creating value opportunities through new technological or IT-related challenge to the relevant in- services dustries. The changing technology will also have far- Industrie 4.0 opens up new ways of creating value reaching organisational implications, providing an op- and new forms of employment, for example portunity to develop new business and corporate through downstream services. Smart algorithms models and facilitating greater employee engagement. can be applied to the large quantities of diverse Germany successfully implemented the third Industrial data (big data) recorded by smart devices in order Revolution (“Industrie 3.0”) during the early 1980s by to provide innovative services. There are particu- delivering more flexible automated manufacturing larly significant opportunities for SMEs and through the integration of Programmable Logic Con- startups to develop B2B (business-to-business) trollers (PLCs) into manufacturing technology whilst at services for Industrie 4.0. the same time managing the impact on the workforce

16 Industrie 4.0 Introduction

1 through an approach based on social partnership. Its have also been successfully launched. The Industry- strong industrial base, successful software industry Science Research Alliance is now progressing this ini- and know-how in the field of semantic technologies15 tiative at a cross-sectoral level through the Industrie 4.0 mean that Germany is extremely well-placed to imple- project. The establishment of the Industrie 4.0 Platform ment Industrie 4.0. It should be possible to overcome with a Secretariat provided jointly by the professional the current obstacles, such as technology acceptance associations BITKOM, VDMA and ZVEI was the logical issues or the limited pool of skilled workers on the la- next step in its implementation. The next task will be to bour market. However, it will only be possible to secure produce R&D roadmaps for the key priority themes. the future of German industry if all the relevant stake- Securing the future of German manufacturing in- holders work together to unlock the potential offered by dustry – this is the goal that the partners in the Indus- the Internet of Things and Services for manufacturing trie 4.0 Platform have set themselves. The Platform in- industry. vites all the relevant stakeholders to continue exploring Since 2006, the German government has been pro- the opportunities provided by Industrie 4.0 so that to- moting the Internet of Things and Services16 under its gether we can help to ensure successful implementa- High-Tech Strategy. Several technology programmes tion of its revolutionary vision.

1 “Over the past thirty years, the ongoing computer revolution has transformed the world in which we information system. The highest level of computerised factory organisation is characterised by a strategy live, probably more radically than anything in the previous 200 years. It has also had a radical impact for integrating the individual subsystems.”, in: Spur, Günther: Evolution der industriellen Produktion, in on the world of work that can only be compared in scale to the first Industrial Revolution.” Quotation Spur, Günther (Ed.): Optionen zukünftiger Produktionssysteme, Berlin, Akademie Verlag 1997, p. 23. from Kornwachs, Klaus: Ergänzung und Verdrängung der Arbeit durch Technik – Eine Herausforder- 8 With annual sales totalling 200.5 billion euros and a workforce of around 931,000 (average figure for ung für die Technikwissenschaften (Enhancement and Replacement of Jobs by Technology – a 2011), the machinery and plant manufacturing industry is an extremely important part of the German challenge for engineering science), in: ibid. (Ed.): Bedingungen und Triebkräfte technologischer economy. Innovationen (Enablers and Drivers of Technological Innovation) (acatech DISCUSSES), Fraunhofer 9 Wirtschaftswoche Ranking, WiWo, 4/2013, pp. 40-50. IRB Verlag, Stuttgart 2007, p. 177 10 VDMA: Tendenzbefragung. Internationale Wettbewerbsposition des deutschen Maschinen- und An- 2 Launched in the summer of 2012, Internet Protocol Version 6 (IPv6) replaces the previous version 4 of lagebaus (Survey of Current Trends. Global Competitive Position of German Machinery and Plant Manu- the protocol. IPv6 uses 128-bit IP addresses instead of the 32-bit addresses that were previously in use, facturers), October 2012. increasing the number of addresses available from 4.3 billion to 340 sextillion. 11 Federal Statistical Office, figures for 2011. Available online at: http://de.statista.com/statistik/daten/ 3 The phenomenon that we refer to as Industrie 4.0 is given different names around the globe. Other terms studie/151019/umfrage/exportgueter-aus-deutschland/ used include the “Industrial Internet” and the “3rd Industrial Revolution”, see also Chapter 6. 12 VDMA: Tendenzbefragung. Internationale Wettbewerbsposition des deutschen Maschinen- und An- 4 For more on innovation and future technology scenarios, see acatech (Ed.): Technikzukünfte. Vorausden- lagebaus (Survey of Current Trends. Global Competitive Position of German Machinery and Plant Manu- ken – Erstellen – Bewerten (Future Technology Scenarios. Planning, Production and Evaluation) (acatech facturers), October 2012. IMPULSE), Heidelberg et al.: Springer Verlag 2012, p.16, which contains the following observation: 13 See the German government’s High-Tech Strategy (HTS) Action Plan, Strategic Initiative Industrie 4.0, p. “When thinking about the future, it is crucial to avoid considering technological innovations outside 52ff. Available online at: http://www.bmbf.de/pub/HTS-Aktionsplan.pdf of their sociocultural context. For example, the future role of different energy carriers will be largely 14 See Vogel-Heuser, Birgit et al.: Forschungsfragen in “Produktautomatisierung der Zukunft“ (Research determined by how well they are accepted by society, the state of the economy and the global political Issues in “Future Product Automation”), (acatech MATERIALS), Munich 2012, p. 28. situation. Terms like ‘innovation systems’ and ‘culture of innovation’ bear witness to the recent trend to 15 Under the auspices of the “Internet of Services” flagship project, the German government funded place greater emphasis on this broader sociocultural context.” the THESEUS research programme between 2007 and 2012 in order to promote the development 5 This report focuses on discussing the potential of Industrie 4.0 with regard to technological innovation. and trialling of new, Internet-based knowledge infrastructures geared towards making better use and 6 Globalised manufacturing is already a reality today, as witnessed in the automotive industry, for example. maximising the value of the knowledge available through the Internet. The research programme focused “German” cars are in fact now international products made with components from Asia, Europe and the on semantic technologies that, instead of detecting content (words, images, sounds) using conventional US and are even assembled in their respective target markets. However, the use of information technol- approaches (e.g. letter combinations), are capable of recognising and classifying the semantic content ogy in this context has hitherto largely failed to reflect the existence of these logistics and manufacturing of information. More information is available online at: http://www.bmwi.de/DE/Themen/Digitale-Welt/ networks. Currently, IT systems still tend not to cross company or factory boundaries. Internet-der-Zukunft/internet-der-dienste,did=360458.html 7 A look at the past also demonstrates IT’s huge potential for changing the way we do things: “From a 16 For more details, see: Promotorengruppe Kommunikation der Forschungsunion Wirtschaft – Wissen- technical perspective, an end-to-end information flow will be key to future factory designs, with elec- schaft (Ed.): Im Fokus: Das Zukunftsprojekt Industrie 4.0 – Handlungsempfehlungen zur Umsetzung tronic data processing enabling all parts of the factory to be connected to each other through a global (Communication Promoters Group Report), Berlin, 2012.

Industrie 4.0 17 2 The vision: Industrie 4.0 as part of a smart, networked world 2 The vision 2 The vision: Industrie 4.0 as part of a smart, networked world

In a “smart, networked world”, the Internet of Things me?”, “where should I be delivered to?”, etc. Its inter- and Services will make its presence felt in all of the key faces with smart mobility, smart logistics and smart areas.1 This transformation is leading to the emergence grids will make the smart factory a key component of of smart grids in the field of energy supply, sustainable tomorrow’s smart infrastructures. This will result in the mobility strategies (smart mobility, smart logistics) and transformation of conventional value chains and the smart health in the realm of healthcare. In the manufac- emergence of new business models.2 turing environment, vertical networking, end-to-end en- Industrie 4.0 should therefore not be approached in gineering and horizontal integration across the entire isolation but should be seen as one of a number of key value network of increasingly smart products and sys- areas where action is needed. Consequently, Industrie tems is set to usher in the fourth stage of industrialisa- 4.0 should be implemented in an interdisciplinary man- tion – “Industrie 4.0”. ner and in close cooperation with the other key areas (see Fig. 2). Industrie 4.0 is focused on creating smart products, procedures and processes. Smart factories constitute a key feature of Industrie 4.0. Smart factories are capa- 2.1 Shaping the vision of Industrie 4.0 ble of managing complexity, are less prone to disrup- Achieving the paradigm shift required to deliver Indus- tion and are able to manufacture goods more efficiently. trie 4.0 is a long-term project and will involve a gradual In the smart factory, human beings, machines and re- process. Throughout this process, it will be key to en- sources communicate with each other as naturally as in sure that the value of existing manufacturing systems is a social network. Smart products know the details of preserved. At the same time, it will be necessary to how they were manufactured and how they are intend- come up with migration strategies that deliver benefits ed to be used. They actively support the manufacturing from an early stage (see also Chapters 3 and 5.4). Nev- process, answering questions such as “when was I ertheless, innovations constituting a quantum leap may made?”, “which parameters should be used to process arise in some individual sectors.

Figure 2: Internet of Service Industry 4.0 and s smart factories as Smart Mobility Smart Logistics part of the Internet of Things and Services

Smart Grids Smart Factory Smart Buildings

CPS

Smart Product

Internet of Things

Industrie 4.0 19 2 The vision

In the fields of production and automation engineering and IT, horizontal integration refers to the integration of the various IT systems used in the different stages of the manufacturing and business planning processes that involve an exchange of materials, energy and information both within a company (e.g. inbound logistics, production, outbound logistics, marketing) and between several different companies (value networks). The goal of this integration is to deliver an end-to-end solution.

In the fields of production and automation engineering and IT, vertical integration refers to the integration of the various IT systems at the different hierarchical levels (e.g. the actuator and sensor, control, production management, manufacturing and execution and corporate planning levels) in order to deliver an end-to-end solution.

If German industry is to survive and prosper, it will need 2.2 What will the future look like under to play an active role in shaping this fourth industrial Industrie 4.0? revolution. It will be necessary to draw on the tradition- Industrie 4.0 will deliver greater flexibility and robust- al strengths of German industry and the German re- ness together with the highest quality standards in search community: engineering, planning, manufacturing, operational and logistics processes. It will lead to the emergence of • Market leadership in machinery and plant dynamic, real-time optimised, self-organising value manufacturing chains that can be optimised based on a variety of • A globally significant cluster of IT competencies criteria such as cost, availability and resource con- • A leading innovator in embedded systems and sumption. This will require an appropriate regulatory automation engineering framework as well as standardised interfaces and har- • A highly-skilled and highly-motivated workforce monised business processes. • Proximity to and in some cases close cooperation between suppliers and users The following aspects characterise the vision for In- • Outstanding research and training facilities dustrie 4.0:

In implementing Industrie 4.0, the aim is to create an • It will be characterised by a new level of socio- optimal overall package by leveraging existing techno- technical interaction between all the actors and logical and economic potential through a systematic resources involved in manufacturing. This will innovation process drawing on the skills, performance revolve around networks of manufacturing resourc- and know-how of Germany’s workforce. Industrie 4.0 es (manufacturing machinery, robots, conveyor will focus on the following overarching aspects: and warehousing systems and production facilities) that are autonomous, capable of controlling • Horizontal integration through value networks themselves in response to different situations, • End-to-end digital integration of engineering across self-configuring, knowledge-based, sensor- the entire value chain equipped and spatially dispersed and that also • Vertical integration and networked manufacturing incorporate the relevant planning and management systems systems. As a key component of this vision, smart factories will be embedded into inter-company These aspects are considered in more detail in Chap- value networks and will be characterised by ter 3 in the context of the dual strategy. end-to-end engineering that encompasses both the manufacturing process and the manufactured

20 Industrie 4.0 2 The vision » The Internet of Things and Services harbours huge potential for innovation in manufacturing. If we also succeed in integrating Web-based services into Industrie 4.0 we will increase the scope of this potential immeasurably. « Dr. Johannes Helbig Deutsche Post AG Member of the Communication Promoters Group of the Industry-Science Research Alliance

product, achieving seamless convergence of the • In the future under Industrie 4.0, it will be possible digital and physical worlds. Smart factories will to incorporate individual customer- and product- make the increasing complexity of manufacturing specific features into the design, configuration, processes manageable for the people who work ordering, planning, production, operation and there and will ensure that production can be recycling phases. It will even be possible to incor- simultaneously attractive, sustainable in an urban porate last-minute requests for changes immedi- environment and profitable. ately before or even during manufacturing and • The smart products in Industrie 4.0 are uniquely potentially also during operation. This will make it identifiable and may be located at all times. Even possible to manufacture one-off items and very while they are being made, they will know the small quantities of goods profitably. details of their own manufacturing process. This • Implementation of the Industrie 4.0 vision will means that, in certain sectors, smart products will enable employees to control, regulate and be able to control the individual stages of their configure smart manufacturing resource networks production semi-autonomously. Moreover, it will be and manufacturing steps based on situation- and possible to ensure that finished goods know the context-sensitive targets. Employees will be freed parameters within which they can function opti- up from having to perform routine tasks, enabling mally and are able to recognise signs of wear and them to focus on creative, value-added activities. tear throughout their life cycle. This information They will thus retain a key role, particularly in can be pooled in order to optimise the smart terms of quality assurance. At the same time, factory in terms of logistics, deployment and flexible working conditions will enable greater maintenance and for integration with business compatibility between their work and their management applications. personal needs.

Industrie 4.0 21 2 The vision • Implementation of the vision for Industrie 4.0 will fairly among all the stakeholders in the value chain, in- require further expansion of the relevant network cluding the new ones. Broader regulatory requirements

infrastructure and specification of network service such as cutting CO2 emissions (see Chapter 5.8) can quality through service level agreements. This will and should be integrated into these business models make it possible to meet the need for high band- so that they can be met collectively by the partners in widths for data-intensive applications and for the business networks (see Fig. 3). service providers to guarantee run times for time-critical applications. Industrie 4.0 use case scenarios relating e.g. to “networked manufacturing”, “self-organising adaptive logistics” and “customer-integrated engineering” will require 2.3 Novel business opportunities and models business models that will primarily be implemented by Industrie 4.0 will lead to the development of new busi- what could be a highly dynamic network of businesses ness and partnership models that are far more geared rather than by a single company. This will raise a num- towards meeting individual, last-minute customer re- ber of questions regarding financing, development, reli- quirements. These models will also enable SMEs to ability, risk, liability and IP and know-how protection. As use services and software systems that they are unable far as the organisation of the network and the qualified to afford under current licensing and business models. differentiation of its services is concerned, it will be cru- The new business models will provide solutions to is- cial to ensure that responsibilities are correctly as- sues such as dynamic pricing that takes account of signed within the business network, backed up by the customers’ and competitors’ situations and issues re- relevant binding documentation. lating to the quality of service level agreements (SLAs) Detailed monitoring of the business models in real time3 in a context characterised by networking and coopera- will also play a key role in documenting processing tion between business partners. They will strive to en- steps and system statuses to demonstrate that the sure that the potential business benefits are shared contractual and regulatory conditions have been com-

Figure 3: Horizontal value network Management and Engineering Production Planning

KPI

Factory 3 Marketing Engineering Production and Sales

Factory 2 Marketing and Sales Suppliers and Subcontractors

Production Smart Grid Customers

External Designer Factory 1 Marketing and Sales Engineering

Source: Hewlett-Packard 2013

22 Industrie 4.0 2 The vision plied with. The individual steps of the business pro- proving the productivity of the workforce. It will be es- cesses will be tracked at all times, providing documen- pecially important to increase the proportion of older tary evidence of their completion (see also 5.7). In people and women in employment. The latest research order to ensure efficient provision of individual services, indicates that individual productivity does not depend it will be necessary to establish exactly what the rele- on a person’s age but is instead connected with the vant service life cycle might look like, which promises amount of time they have been in a particular position, can be guaranteed and which licence models and con- the way that their work is organised and their working ditions would allow new partners – especially SMEs – environment. If productivity is to be maintained and in- to join the business networks. creased over the course of longer working lives, it will In view of the above, it is likely that Industrie 4.0 will therefore be necessary to coordinate and transform give rise to unpredictable global effects and a highly several different aspects of the workplace, including dynamic environment. The disruptive nature of new health management and work organisation, lifelong technologies and their impact on legal issues (e.g. with learning and career path models, team structures and regard to technology, sensitive corporate data, liability, knowledge management.4 This is a challenge that will data protection, trade restrictions, use of cryptography, have to be met not just by businesses but in particular etc) can pose a threat to the enforceability of existing also by the education system. legislation. Short innovation cycles result in the need Thus, it will not only be new technical, business and legal for constant updating of the regulatory framework and factors that determine Germany’s future competitive- cause chronic failings in terms of enforcement. It will ness, it will also be the new social infrastructures in therefore be necessary to adopt a new approach the Industrie 4.0 workplace that have the capacity to whereby technologies are tested for their compatibility achieve far greater structural involvement of workers in with the law both prior to and during their development the innovation process. (see Chapter 5.7). Another factor that is key to the success of the Industrie 4.0 initiative is the topic of safety An important role will also be played by the paradigm and security (see Chapter 5.4). Once again, a far more shift in human-technology and human-environment proactive approach will be required in this area. Fur- interaction brought about by Industrie 4.0, with novel thermore, it will be important to ensure that the concept forms of collaborative factory work that can be per- of Security by Design is not simply confined to func- formed outside of the factory in virtual, mobile work- tional components. places. Employees will be supported in their work by smart assistance systems with multimodal, user-friendly user interfaces. 2.4 New social infrastructures in the workplace In addition to comprehensive training and CPD meas- Industrie 4.0 will bring a number of innovations to a ures, work organisation and design models will be key country that is in the throes of demographic change – to enabling a successful transition that is welcomed by Germany has the second oldest population in the the workforce. These models should combine a high world, after Japan, whilst the average age of the work- degree of self-regulated autonomy with decentralised force at many German manufacturing companies is in leadership and management approaches. Employees the mid-forties. The number of young employees is in should have greater freedom to make their own deci- constant decline and there is already a shortage of sions, become more actively engaged and regulate skilled labour and applicants for apprenticeships in cer- their own workload. tain professions. In order to ensure that demographic The socio-technical approach of the Industrie 4.0 change does not occur at the expense of current living initiative will unlock new potential for developing ur- standards, it will be necessary for Germany to make gently needed innovations, based on a greater aware- better use of its existing labour market reserves for In- ness of the importance of human work in the innovation dustrie 4.0 whilst at the same time maintaining and im- process.

Industrie 4.0 23 2 The vision 2.5 Novel service-based, real-time enabled • Support for mobile end devices CPS platforms • Support for collaborative manufacturing, service, analysis and forecasting processes in business The strategic initiative Industrie 4.0 will give rise to novel networks. CPS platforms geared towards supporting collaborative industrial business processes and the associated In the context of the business networks, there is a par- business networks for all aspects of smart factories and ticular need for IT development work with regard to smart product life cycles. the orchestration of services and applications on The services and applications provided by these plat- shared CPS platforms, since this is where the specific forms will connect people, objects and systems to each requirements for horizontal and vertical integration of other (see Fig. 4) and will possess the following features: CPS, applications and services arise in industrial business processes (see also Chapter 5.1). For In- • Flexibility provided by rapid and simple orchestra- dustrie 4.0, it is important to interpret the term ‘or- tion of services and applications, including CPS- chestration’ more broadly than is usually the case in based software the context of web services. It should explicitly include • Simple allocation and deployment of business the setting up of shared services and applications in processes along the lines of the App Stores model collaborative inter-company processes and business • Comprehensive, secure and reliable backup of the networks. Issues such as safety and security, confi- entire business process dence, reliability, usage, operator model convergence, • Safety, security and reliability for everything from real-time analysis and forecasting will all need to be sensors to user interfaces reviewed for the orchestration and subsequent effi-

Figure 4: Internet of People The Internet of Things and 106-108 Social Web Services – Networking people, objects and systems

CPS- platforms

Smart Grid Business Web Smart Factory

Smart Building

Smart Home

Internet of Things Internet of Services 107-109 104-106

Source: Bosch Software Innovations 2012

24 Industrie 4.0 2 The vision cient, reliable, safe and secure operation of collabora- Availability of a secure and efficient network infrastruc- tive manufacturing and service processes as well as ture with high bandwidths will be key to guaranteeing the for the execution of dynamic business processes on necessary secure data exchange (see Chapter 5.3). CPS platforms. Among other things, this will involve addressing the challenges posed by the wide range of different data sources and end devices. The require- 2.6 The road to Industrie 4.0 ments referred to above are currently met in only a Implementing the vision of Industrie 4.0 will involve an evo- very rudimentary fashion by generic cloud infrastruc- lutionary process that will progress at different rates in in- ture initiatives. Inter-company use of CPS platforms dividual companies and sectors. A survey on the “pros- by IT, software and service providers and by the users pects for Industrie 4.0” carried out at the beginning of the themselves will require an Industrie 4.0 reference ar- year by the professional associations BITKOM, VDMA chitecture that will need to take account of the differ- and ZVEI confirmed the importance of this topic for the ent perspectives of the ICT and manufacturing indus- competitiveness of German industry and documented the tries (see Chapter 5.1). Modelled methods will be need for fuller and more targeted information (see Fig. 5). required to develop new applications and services for Some 47 percent of the companies in the survey5 said these CPS platforms, in order to manage the com- that they were already actively engaged with Industrie 4.0. plexity resulting from increasing functionality, customi- 18 percent of these companies said that they were in- sation, dynamism and cooperation between different volved in research into Industrie 4.0, whilst 12 percent disciplines and organisations (see Chapter 5.2). claimed that they were already putting it into practice.

Figure 5: Are you already engaged with Industrie 4.0? What are the greatest challenges connected with Results of survey implementing Industrie 4.0? (you may select more than one answer) on Industrie 4.0 trends Yes: 131* (January 2013) Standardisation 147 No: 133 Process/work organisation 129 Product availability 98 How are you engaging with this topic? New business models 85 Security know-how protection 78 Obtaining information 112 about it Lack of specialist staff 70 Involved in research 51 Research 64 Training and CPD 42 Putting it into practice 33 Regulatory framework 30 020406080100 120 140 020406080100 120 140160

How important is Industrie 4.0 for your What support measures would you like to assist competitiveness as a: you with implementation of Industrie 4.0? Manufacturer: 4 / important** Opportunity to share experiences 162 1 2 3 4 5 6 Regular newsletter 109 Not at all important Indispensable Involvement in working groups 78 Training courses/seminars 66 User: 3 / average Involvement in research projects 60 1 2 3 4 5 6 Online forums 41 Not at all important Indispensable 020406080100 120 140160

278 companies took part in the survey, mainly from the machinery and plant manufacturing industry. 205 of the companies that took part had fewer than 500 employees. * The figures refer to the number of companies** Average score based on answers provided by all companiesSource: BITKOM, VDMA, ZVEI 2013

Industrie 4.0 25 2 The vision The three greatest challenges connected with imple- • Business processes in manufacturing are currently menting the vision were identified as standardisation, often still static and implemented through extremely work organisation and product availability. inflexible software systems. However, they cannot Alongside active involvement in working groups, other simply be replaced overnight by service-oriented support measures requested by companies to aid them systems. It will be essential to integrate new with implementation of Industrie 4.0 include targeted technologies into older ones (or vice versa) – old seminars where they can share experiences and regu- systems will need to be upgraded with real-time lar newsletters. The professional associations will play enabled systems. an important role in ensuring a steady flow of communi- • The rate of development of new business models cation, working closely with the social partners, the for manufacturing in the Internet of Things and academic community and the public. Approximately 50 Services will approach the rate of development and percent of the companies surveyed said that they had dynamism of the Internet itself. already received information about Industrie 4.0 • Employees will be involved at an early stage in the through their professional associations. innovative socio-technical design of work organisa- In addition to the above, the Working Group considers tion, CPD and technological development (see the following measures to be key to enabling a smooth Chapter 5.5). transition to Industrie 4.0 for businesses: • In order to achieve the transition to Industrie 4.0, it will be necessary for the ICT industry (that is • Implementation of real-time enabled CPS solutions accustomed to short innovation cycles) to work will place high demands on the availability of services closely with machinery and plant manufacturers and and network infrastructure in terms of space, mechatronic system suppliers (who tend to think in technical quality and reliability. In order to secure terms of much longer innovation cycles) in order to Germany’s competitiveness internationally, harmoni- develop business models that are acceptable to all sation of services and business models through the the partners. introduction of the relevant international standards should be supported by policymakers both nationally and globally (see also Chapters 5.1 and 5.3).

TAKE-HOME MESSAGE: In conjunction with smart production, smart logistics, smart grids and smart products, the increasing use of the Internet of Things and Services in manufacturing will transform value chains and lead to the emergence of new business models. The strategic initiative Industrie 4.0 will leverage the existing technological and commercial potential. Indus- trie 4.0 offers the prospect of new business opportunities and innovative new social infrastructures in the workplace.

1 In 2009, the Industry-Science Research Alliance identified five key areas for action: climate/energy, 3 “Real time” refers to data processing that occurs synchronously with events in the real world, as opposed mobility, health, security and communication; more information online at: www.forschungsunion.de. to data processing where a delay is involved. 2 Since the 3rd industrial revolution, ICT has not only been used in manufacturing in order to optimise costs 4 See Altern in Deutschland, Vol. 9: Gewonnene Jahre, Empfehlungen der Akademiengruppe, Nova Acta and efficiency, but also in processes that touch on or overlap with manufacturing such as logistics, diag- leopoldina NF No. 371, Vol. 107, Stuttgart 2009, p. 49, 56. Immigrants and low-skilled workers (if they nostics, quality assurance, maintenance, energy management or human resource planning. However, the receive further training) also constitute sources of untapped potential for the labour market, see OECD: different IT systems have developed separately over time and the separate evolution and predominantly Zuwanderung ausländischer Arbeitskräfte: Deutschland, 2013, available online at: closed nature of their architectures means that technically it would be extremely complex to integrate http://www.oecd-ilibrary.org/social-issues-migration-health/zuwanderung-auslandischer-arbeitskrafte- them. This makes it exceptionally difficult to achieve comprehensive networking of IT systems and flexible deutschland-german-version_9789264191747-de reconfiguration of manufacturing systems, meaning that it is often simply not possible to take advantage 5 278 companies participated in the survey, Source: BITKOM, VDMA and ZVEI, January 2013. of the potential offered by this approach. In Industrie 4.0, these restrictions will no longer apply.

26 Industrie 4.0 EXAMPLE APPLICATION 1: Reducing the energy consumed by a vehicle body assembly line while it is not in use

Today, energy efficiency is already an important requirement for machinery. A key enabler for meeting this require-

ment is the ability to systematically power down inactive parts of a line during breaks in production. Industrie 4.0 will make greater use of the opportunities that exist to do this by ensuring that this capability is consistently integrated into the planning and operation of production facilities.

Today Potential savings during planned and unplanned breaks in production Currently, many production lines or parts thereof Potential savings during planned and unplanned breaks in production continue running and consuming high quantities of energy during breaks, weekends and shifts where there is no production. For example, 12 percent of the total energy consumption of a vehicle body assembly line that uses laser welding technology occurs

Electricity consumption during breaks in production. The line operates five days a week on a three shift pattern. Although this complex Electricity consumption piece of machinery is not in use over the weekend, it 24 hours remains powered up so that it can resume production Source: Siemens 2013 24 hours immediately once the weekend is over. 90 percent of power consumption during breaks in pro- Source: Siemens 2013 duction is accounted for by the following: robots (20 to 30 percent), extractors (35 to 100 percent) and laser sources and their cooling systems (0 to 50 percent). Tomorrow Measures to leverage energy efficiency potential: Potential savings over the weekend In the future, robots will be powered down as a matter

of course even during short breaks in production. Dur- Potential savings over the weekend

ing longer breaks in production they will enter a kind of standby mode known as Wake-On-LAN mode.1 The extractors will use speed-controlled motors that can be adjusted to meet requirements instead of motors

Electricity consumption that cannot be controlled in this way. In the case of the laser sources, completely new systems are the only Electricity consumption Wed Thu Fri Sat SunMon Tue way of delivering improvements. Day Taken together, these measures enable a reduction of Wed Thu Fri Sat SunMon Tue Quelle: Siemens 2013 12 percent of total energy consumption to be Day achieved (from 45,000kWh/w to approx. 40,000kWh/w), Quelle: Siemens 2013 together with a 90 percent cut in energy consumption during breaks in production. These energy efficiency considerations should be taken into account right from 1 The robots are controlled using PROFIenergy the earliest stages when designing CPS.

POTENTIAL BENEFITS Coordinated power-up and power-down of parts of a vehicle body assembly line leads to improved energy efficiency. Whilst the cost/risk ratio and cost-effectiveness of upgrading existing machinery are not very attractive, this approach will become an established technical standard for the new machines that will be developed by Industrie 4.0’s leading suppliers, enabling improved energy efficiency to be achieved. 3 The dual strategy: becoming a leading market and supplier 3 The dual strategy 3 The dual strategy: becoming a leading market and supplier

The fourth industrial revolution (Industrie 4.0) holds huge existing facilities with CPS capabilities as part of potential for manufacturing industry in Germany. In- the strategy for migrating to Industrie 4.0. At the creased deployment of CPS in German factories will same time, it will be necessary to develop models strengthen German manufacturing industry by improving and strategies for designing and implementing CPS the efficiency of domestic production. At the same time, manufacturing structures at new sites. the development of CPS technology offers significant • If Germany wishes to achieve its goal of lasting opportunities for exporting technologies and products. leadership as a supplier of Industrie 4.0 equipment, Consequently, the implementation of the Industrie 4.0 research, technology and training initiatives initiative should aim to leverage the market potential for should be promoted as a matter of priority with a German manufacturing industry1 through the adoption view to developing methodologies and pilot applica- of a dual strategy comprising the deployment of CPS tions in the field of automation engineering modelling in manufacturing on the one hand and the marketing and system optimisation (see Chapter 5.2). of CPS technology and products in order to strength- • Another key challenge will be to use the technol- en Germany’s manufacturing equipment industry on ogy to create novel value networks. This will the other. involve developing new business models, particularly ones that link products with the appropriate services. 3.1 Leading supplier strategy The leading supplier strategy addresses the potential of Industrie 4.0 from the point of view of the equipment 3.2 Leading market strategy supplier industry . German equipment suppliers provide The leading market for Industrie 4.0 is Germany’s domes- manufacturing industry with world-leading technological tic manufacturing industry. In order to shape and suc- solutions and are thus in pole position to become global cessfully expand this leading market, close networking of leaders in the development, production and worldwide parts of businesses located at different sites will be re- marketing of Industrie 4.0 products. The key is now to quired, together with closer cooperation between differ- find smart ways of combining outstanding technological ent enterprises. This will in turn require logical, end-to- solutions with the new potential offered by information end digital integration of the different value creation technology, in order to achieve a quantum leap in in- stages and the life cycles of products, product ranges novation. It is this systematic combination of information and the corresponding manufacturing systems. One par- and communication technology with traditional high-tech ticular challenge will be to achieve simultaneous inte- strategies that will enable rapidly changing markets and gration into these emerging new value networks of increasingly complex global market processes to be both large-scale undertakings that already operate managed so that companies can carve out new market globally today and SMEs that often still operate only opportunities for themselves. at a regional level. The strength of Germany’s manufacturing industry is in no small measure due to a balanced • Existing basic IT technologies need to be adapt- structure comprising a large number of small and medi- ed to the specific requirements of manufactur- um-sized enterprises and a smaller number of large-scale ing and continue to be developed with this undertakings. However, many SMEs are not prepared for particular application in mind. In order to achieve the structural changes that Industrie 4.0 will entail, either economies of scale and ensure widespread because they lack the requisite specialist staff or be- effectiveness, it will be necessary to enhance the cause of a cautious or even sceptical attitude towards a manufacturing technology and IT systems of technology strategy that they are still unfamiliar with.

Industrie 4.0 29 3 The dual strategy » Germany’s economy is characterised by its strong industrial base, particularly its machinery and plant manufacturing, automotive and energy industries. Implemen- tation of Industrie 4.0 will be absolutely key to its future development – we cannot allow industry to come to a standstill. « Ernst Burgbacher Parliamentary State Secretary Federal Ministry of Economics and Technology

One key strategy for integrating SMEs into global value 3.3 The dual strategy and its key features networks is therefore the design and implementation of a comprehensive knowledge and technology Optimal delivery of Industrie 4.0’s goals will only be transfer initiative. For example, pilot applications and possible if the leading supplier and leading market best practice examples of networks of large-scale in- strategies are coordinated to ensure that their poten- dustrial undertakings and SMEs could help to make the tial benefits complement each other. Hereafter, this potential of networked value chains more visible and approach will be referred to as the dual strategy. The convince small and medium-sized enterprises to adopt strategy incorporates three key features (see also the methodological and organisational tools and tech- Chapter 2.1): nologies of the leading suppliers. This would remove • Development of inter-company value chains and the barriers to SMEs becoming acquainted with CPS networks through horizontal integration methodologies, taking them on board and implement- • Digital end-to-end engineering across the entire ing them in their own businesses. value chain of both the product and the associated In order to make this possible, it will be essential to ac- manufacturing system celerate the use and development of the technological • Development, implementation and vertical integra- infrastructure, including high-speed broadband data tion of flexible and reconfigurable manufacturing transmission (see Chapter 5.3). In parallel, it will also systems within businesses be important to educate and train skilled workers (see Chapter 5.6) whilst simultaneously developing custom- These features are the key enablers for manufacturers ised and efficient organisational designs for complex to achieve a stable position in the face of highly volatile working arrangements (see Chapter 5.5). markets whilst flexibly adapting their value creation ac-

30 Industrie 4.0 3 The dual strategy tivities in response to changing market requirements. 3.3.2 End-to-end engineering across the The features outlined under this dual CPS strategy will entire value chain allow manufacturing companies to achieve rapid, on- The following key question arises in connection with time, fault-free production at market prices in the con- the goal of achieving end-to-end digital integration text of a highly dynamic market. throughout the engineering process so that the digital and real worlds are integrated across a product’s entire 3.3.1 Horizontal integration through value networks value chain and across different companies whilst also Models, designs and implementations of horizontal in- incorporating customer requirements: tegration through value networks should provide answers to the following key question: How can CPS be used to deliver end-to-end business processes including the engineering work- How can companies’ business strategies, new val- flow? ue networks and new business models be sustain- ably supported and implemented using CPS? In this regard, modelling plays a key role in managing the increasing complexity of technological systems This question applies in equal measure to the realms (see Chapter 5.2). The appropriate IT systems should of research, development and application (see Fig. 6). be deployed in order to provide end-to-end support to In addition to “business models” and “forms of coop- the entire value chain, from product development to eration between different companies”, it is also neces- manufacturing system engineering, production and ser- sary to address topics such as “sustainability”, “know- vice (see Fig. 7). A holistic systems engineering ap- how protection”, “standardisation strategies” and proach is required that spans the different technical “medium to long-term training and staff development disciplines. For this to be possible, engineers will need initiatives”. to receive the appropriate training.

Figure 6: Horizontal integration through value networks

Source: Siemens 2012

Figure 7: End-to-end engineering across the entire Services value chain Production Production engineering Production planning Product design and development Source: Siemens 2012

Industrie 4.0 31 3 The dual strategy 3.3.3 Vertical integration and networked In order to deliver vertical integration, it is essential to manufacturing systems ensure end-to-end digital integration of actuator and As far as vertical integration is concerned, the following sensor signals across different levels right up to the ERP key question needs to be answered: level. It will also be necessary to develop modularisation How can CPS be used to create flexible and recon- and reuse strategies in order to enable ad hoc network- figurable manufacturing systems? ing and reconfigurability of manufacturing systems, together with the appropriate smart system capability de- The setting for vertical integration is the factory. In tomor- scriptions. Moreover, foremen and operators will need to row’s smart factories, manufacturing structures will not be trained to understand the impact of these approach- be fixed and predefined. Instead, a set of IT configuration es on the running and operation of the manufacturing rules will be defined that can be used on a case-by-case system. basis to automatically build a specific structure (topology ) for every situation, including all the associated requirements in terms of models, data, communication and algorithms (see Fig. 8).

Figure 8: Vertical integration and networked manufacturing systems

Source: Siemens 2012

TAKE-HOME MESSAGE: Industrie 4.0 can serve to create horizontal value networks at a strategic level, provide end-to-end integration across the entire value chain of the business process level, including engineering, and enable verti- cally integrated and networked design of manufacturing systems. Implementation of the strategic initiative Industrie 4.0 – both in terms of research funding and concrete development and implementation measures – should therefore be based on a dual strategy geared towards delivering the twin goals of creating a leading market among Germany’s manufacturing companies and making Germany’s manufacturing equipment industry into a leading supplier.

1 Manufacturing industry includes all companies that manufacture (or have someone else manufacture) a (PLM) systems, manufacturing or logistics software applications or business planning software systems. physical product in a manufacturing system by processing raw materials and semi-finished products. This 3 Topology refers to the way that a manufacturing system is configured using manufacturing resources (e.g. includes both machining and process-based processing. machines, jobs, logistics) and the associated interactions (e.g. material flow). 2 The equipment supplier industry includes machinery and plant manufacturers, suppliers of automation products, systems and solutions and software companies that supply e.g. Product Lifecycle Management

32 Industrie 4.0 EXAMPLE APPLICATION 2: End-to-end system engineering across the entire value chain

Benefits: End-to-end digital system engineering and the resulting value chain optimisation will mean that customers no longer have to choose from a predefined range of products specified by the manufacturer but will instead be able to mix and match individual functions and components to meet their specific needs.

Today Today’s value chains – from customer requirements to A variety of interfaces between IT support systems product architectures and production – have often aris- en over a period of many years and tend to be relatively static. IT support systems exchange information via a variety of interfaces, but can only use this information with regard to specific individual cases. There is no A variety of interfaces between IT support systems global overview from the perspective of the product that is being manufactured. As a result, customers cannot freely select all of their product’s functions and features, even though technically it would be possible Source: Siemens 2013 to allow them to do so. For example, it is possible to order a rear windscreen wiper for an estate car, but not for a limousine made by the same company. Further- more, IT system maintenance costs are currently still End-to-end system engineering Source: Siemens 2013 very high. Tomorrowacross the entire value chain The model-based development enabled through CPS End-to-end system engineering allows the deployment of an end-to-end, modelled, digi- across the entire value chain tal methodology that covers every aspect from customer requirements to product architecture and manufacture of the finished product. This enables all the interdependencies to be identified and depicted in an Source: Siemens 2013 end-to-end engineering tool chain. The manufacturing system is developed in parallel based on the same paradigms, meaning that it always keeps pace with product development. As a result, it becomes feasible to manu- Source: Siemens 2013 facture individual products. It is possible to preserve the value of the current installed base by migrating to this tool chain gradually over a number of stages.

POTENTIAL BENEFITS 1. Higher sales thanks to a larger market and higher customer satisfaction. 2. Reduction of internal operating costs through digital end-to-end integration of the value chain. 4 Research requirements 4 Research requirements 4 Research 4 Research requirements

Although Industrie 4.0 will largely be implemented by proaches and best practice examples will need to be industry itself, there is still a fundamental need for fur- disseminated across the different levels of the value ther research. The Industrie 4.0 Working Group identi- networks in order to achieve cross-discipline knowl- fied and presented the main medium- and long-term edge and technology transfer. It is for this reason that research requirements and actions in October 2012. the section on the dual strategy (see Chapter 3) has These are summarised in the following section. already provided an in-depth look at three of the five The main aim of Industrie 4.0 is to implement a dual central research themes: strategy (see Chapter 3) based on coordination of the leading supplier and leading market strategies. This 1. Horizontal integration through value networks should be supported by research activities. In Industrie 2. End-to-end engineering across the entire 4.0, it is expected that the revolutionary applications value chain will come about principally as a result of combining ICT 3. Vertical integration and networked with manufacturing and automation technology. manufacturing systems For this to happen, existing CPS features will need to be adapted in the medium term for deployment in man- In the long term, this technology-driven research cen- ufacturing systems. This will require machine and plant tred around manufacturing system applications will re- manufacturers’ strengths as integrators to be pooled sult in an increase in inter-company or inter-divisional with the competencies of the ICT and automation in- interdisciplinary cooperation that will act as a strategic dustries to establish targeted, creative development enabler for predominantly small and medium-sized ma- processes for creating new CPS. The new level of net- chinery and plant manufacturers. This will allow the in- working required to achieve end-to-end integration of dustry to respond much more swiftly to market require- product models, manufacturing resources and manu- ments and establish itself as the leading supplier of a facturing systems is going to necessitate a huge re- wide range of new products, services and business search and development effort in the longer term. models. The priority for future research is shifting towards However, interdisciplinarity will not come about purely the investigation and development of fully describ- through greater cooperation between engineers and able, manageable, context-sensitive and controlla- automation engineers. The significant impact of the ble or self-regulating manufacturing systems. fourth industrial revolution on the industrial jobs of to- In the long term, these will consist of functional CPS morrow is something that will have to be addressed components drawn from cross-discipline, modular tool- both through research and at a practical level. This kits that can either be configured using help functions brings us to the fourth research requirement: or integrate themselves synergistically into an existing infrastructure during production. It should also be pos- 4. New social infrastructures in the workplace sible to achieve significantly enhanced integration of In the interests of social responsibility, it will be neces- virtually planned and real manufacturing processes. In sary to increase the involvement and promote the en- the long term, it will therefore be necessary for re- gagement of employees in terms of using their skills searchers to develop modular CPS and the corre- and experience with regard to both creative design and sponding component catalogues as a key feature planning processes as well as in the operational work- of any model smart factory. ing environment. CPS will therefore require new work A quantum leap in innovation will only be achieved if organisation structures covering the entire value net- existing basic technologies are developed in an applied work in order to boost employees’ productivity and pro- manner to meet the specific requirements of the manu- vide organisational structures that support individuals’ facturing environment. The resulting methods, ap- lifelong development.

Industrie 4.0 35 4 Research requirements 4 Research » Through Industrie 4.0 we will also be enabling a paradigm shift in human-technology interaction. It will be machines that adapt to the needs of human beings and not vice versa. Smart industrial assistance systems with multimodal user interfaces will bring digital learning technologies directly into the workplace « Prof. Dr rer. nat. Dr h. c. mult. Wolfgang Wahlster CEO of the German Research Center for Artificial Intelligence (DFKI GmbH) Member of the Communication Promoters Group of the Industry-Science Research Alliance

An interdisciplinary approach should be adopted to establish service-based, real-time enabled infrastruc- these issues, drawing on the expertise of a team tures as (or belonging to) ICT platforms for vertical and comprising engineers, IT experts, psychologists, er- horizontal integration as already touched upon in Chap- gonomists, social and occupational scientists, doc- ter 2. These infrastructures will need to be standardised tors and designers. so that they can be used by different companies and The basic overview presented above indicates that technologically orchestrated in order to enable the wide- practical methods and basic technologies to enable spread creation of shared business networks through collaborative work in the realm of manufacturing and the establishment of the appropriate web services. automation engineering are currently still widely una- This brings us to the final area where research and ac- vailable in many areas. tion are still required for Industrie 4.0: In order to ensure that they can be used in different companies and industries with different IT systems, technical 5. Cyber-Physical Systems technology resources and competencies, the basic ICT technologies need to be adapted to the requirements of automa- The consolidated research requirements have been tion engineering. A further key to success will be the broken down into the five research areas described in establishment of practical reference architectures. this section. The feedback received through the Indus- Among other things, this aspect relates to the need to trie 4.0 Working Group, including contributions from

36 Industrie 4.0 4 Research requirements 4 Research the business and research communities, builds on the requirements of automation and manufacturing engi- recommendations of the Communication Promoters neering, including the continuation of efforts to address Group that were submitted to the Industry-Science Re- general research requirements in this regard. They search Alliance in two reports in January and Septem- should also be regarded as a concrete description of ber 2011. It remains desirable to implement these rec- the actions required in order to implement the vision ommendations, together with the outcomes of the described above for the specific application of “indus- BMBF-sponsored project “Integrated Research Agen- trial engineering”. da Cyber-Physical Systems”1 and the BMWi study In order to provide ideas and guidance for the make-up “Das wirtschaftliche Potential des Internets der Dien- of the relevant funding programmes, the Industrie 4.0 ste” (The Economic Potential of the Internet of Servic- Working Group has furthermore identified the key ac- es). Consequently, they should be understood as refer- tions and research requirements for the medium to ring to the need to adapt basic ICT technologies to the long term.

TAKE-HOME MESSAGE: An intensive dialogue between the relevant ministries and the Industrie 4.0 Platform will be required in order to put together a comprehensive funding package for industry and the research community. The Industrie 4.0 Platform should ensure that its Industrial Steering Committee and Scientific Advisory Committee include experts from the realms of manufacturing, automation and IT, legal and management experts and social scientists. The Industrie 4.0 Platform’s Working Groups should invite additional experts from the research and business communities to assist with the immediate task of drawing up comprehensive R&D roadmaps that adapt the consolidated research recommendations to the specific requirements of each working group. In addition to facilitating discussions and informal exchanges within the Industrie 4.0 community, the Indus- trie 4.0 Platform should also identify potential synergies between the various projects and partnerships that are currently in existence.

1 See research recommendations for CPS in manufacturing: “The deployment of Cyber-Physical Systems and economic barriers and accelerating the implementation and deployment of smart factories.” Quotation in manufacturing systems creates smart factories whose products, resources and processes are all from: acatech (Ed.): Cyber-Physical Systems. Innovationsmotor für Mobilität, Gesundheit, Energie und characterised by Cyber-Physical Systems. Their specific qualities offer advantages over conventional Produktion (Cyber-Physical Systems. Driving force for innovation in mobility, health, energy and produc- manufacturing systems with regard to quality, time and costs. As part of the “Industrie 4.0” initiative tion) (acatech POSITION PAPER), Heidelberg et al.: Springer Verlag 2011, p. 35. launched in 2011, we recommend the establishment of a project geared towards removing technological

Industrie 4.0 37 5 Priority areas for action 5 Recommended actions 5 Priority areas for action

Industrie 4.0 is a complex initiative that embraces several partner companies. It provides a framework for the partially overlapping areas. In October 2012, the Indus- structuring, development, integration and operation of trie 4.0 Working Group presented a comprehensive col- the technological systems relevant to Industrie 4.0. It lection of medium- and long-term research recommen- is provided in the shape of software applications and dations. The following sections focus on the key priority software services (see e.g. Fig. 9). areas where the Working Group believes that there is a need for concrete industrial policy and business deci- Since the value network in Industrie 4.0 comprises sions to be taken in order for the recommendations to be several different companies with very different busi- implemented. The Industrie 4.0 Platform was established ness models, the role of the reference architecture is in order to shape the implementation process. to pull together these divergent approaches into one single, common approach. This will require the partners to agree on the basic structural principles, inter- 5.1 Standardisation and open standards for a faces and data. reference architecture The example of a manufacturing system serves to out- If Industrie 4.0 is to enable inter-company networking line some of the different perspectives that would and integration through value networks (see Chapter need to be integrated into a reference architecture 3), the appropriate standards will need to be devel- (see Fig. 10): oped. Standardisation efforts will need to focus on stipulating the cooperation mechanisms and the infor- • The perspective of the manufacturing process in mation that is to be exchanged. The complete technical terms of processing and transport functions description and implementation of these provisions is • The perspective of specific networked devices in a referred to as the reference architecture. manufacturing system, such as (smart) automation devices, field devices, fieldbuses, programmable The reference architecture is thus a general model logic controllers, operating devices, mobile devices, that applies to the products and services of all the servers, workstations, Web access devices, etc

Figure 9: Level Requirements Reference architecture Town Company for connecting the Applications Access to markets Mobility Industry and customers Internet of Things Energy Buildings with the Internet of Services Services Services App Services Services Internet Knowledge of Solutions of Services business areas Business Processes Business Processes and applications

Internet-based Model-based Compiling and networking of functions, data and processes system development Management of end devices and systems & service platforms platforms

Internet Connectivity of Things (IPv6)

Source: Bosch Software Innovations 2012

Industrie 4.0 39 5 Recommended actions

Figure 10: Perspective: Manufacturing process Perspective: Devices Examples of the different perspectives included in the Industrie 4.0 reference Reference architecture architecture Industrie 4.0

Perspective: Software Perspective: Engineering Business management Services software Production Production management Production software engineering Production planning Control and regulation Product design and software development Source: Siemens 2013

• The perspective of the software applications in the Challenges manufacturing environment, such as data acquisi- The first challenge is to pull together the different es- tion through sensors, sequential control, continuous tablished ways of seeing things that currently exist in control, interlocking, operational data, machine the realms of data, process data, archiving, trend analysis, planning and optimisation functions, etc • production engineering, mechanical engineering, • The perspective of the software applications used process engineering, by one or more businesses, e.g. for business • automation engineering and planning and management, inter-company logistics • IT and the Internet or supporting value networks, including the relevant interfaces and integration with the manufacturing and establish a common approach. Since Industrie environment 4.0 will require cooperation between companies in • The engineering perspective in a manufacturing the machinery and plant manufacturing, automation system (Product Lifecycle Management/PLM). For engineering and software sectors, the first step will be example, this could involve using data derived to agree on a common basic terminology. from the manufacturing process to plan the Although several established standards are already in necessary resources (in terms of both machinery use by the various technical disciplines, professional and human resources). It would subsequently be associations and working groups, a coordinated over- possible to successively optimise machines in view of these standards is currently lacking. It is there- terms of their mechanical, electrical and automa- fore necessary for existing standards e.g. in the field tion technology properties, right up to the point of automation (industrial communication, engineering, where the manufacturing system is set up and modelling, IT security, device integration, digital facto- brought online, whilst also taking operation and ries) to be incorporated into a new global reference maintenance into account. architecture.

40 Industrie 4.0 5 Recommended actions The reference architecture cannot be developed in a • Open development tools: a community comprising top-down manner since it will need to integrate several over 1,500 developers and millions of users different perspectives and a top-down approach would develops software for demanding modelling in any case take far too long. It therefore makes sense applications. for the reference architecture to be developed incre- mentally and from a variety of starting points. In this • Open communication infrastructure: “Requests for regard, it will be necessary for strategies that are cur- Comments” are technical and organisational rently often implemented in a project-specific manner documents published through the Internet Society based on local circumstances to be gradually convert- that were first established as long ago as ed into an international standard. In doing so, it will be 07.04.1969. Their widespread acceptance and use important to ensure that interfaces remain technically has converted them into de facto standards. stable for many years to come and to preserve the val- Well-known examples include the Internet protocol ue of the installed base. On the Internet, the approach (TCP/IP) and e-mail protocol (SMTP). to standardisation is based on different paradigms to those that are currently the norm in the machinery and These paradigms enable standardisation efforts to be plant manufacturing industry, for example progressed far more rapidly. Finally, it will be important to build trust in the reference • Open operating systems: in the case of Linux, a architecture. This is particularly relevant with regard to community of businesses, research institutions and know-how protection (see Chapter 5.7). It will also be individuals comprising more than 2,000 developers key to ensure that the full range of intended users of the in over 100 countries develops and maintains one reference architecture are appropriately engaged in its of the world’s most successful operating systems. design right from the early stages.

Recommended actions The Industrie 4.0 Working Group recommends the establishment of a Working Group under the auspices of the Industrie 4.0 Platform to deal exclusively with the topic of standardisation and a reference architecture. The Working Group’s remit would include the following tasks:

• Building a shared understanding of the goals, benefits, potential and risks, possible content and implementation strategies with a view to creating the mutual confidence needed to support joint implementation measures. The professional associations should take the lead with regard to the implementation of confidence-building measures. • Alignment of the key terminology and subsequent production of a common “Industrie 4.0 glossary”. In addition, detailed attention should to be paid to those aspects of the following issues that are relevant to the specific content of Industrie 4.0: • Model universals (underlying core models, reference models, architecture designs) • Standards for the Industrie 4.0 service architecture • Standards for a supra-automation level procedural and functional description • Terminology standards and the use of ontologies • Understanding of autonomous and self-organising systems, including their planning, operation and security • Characteristics maintenance and system structure description • Approach to migrating existing architectures

Industrie 4.0 41 5 Recommended actions

• Production of a bottom-up map outlining the standardisation bodies that currently exist today. Current, established “automation reference architecture” approaches and examples would then be located on the map. This could serve as a basis for assessing the different themes with regard to further development and migration in the context of Industrie 4.0 and identifying clusters of themes that are not currently covered. • Starting work on the production of a top-down roadmap, taking account of cost-benefit considerations and time constraints. A holistic approach should be adopted in order to strike a sensible balance between standardisation and individuality. The structure should be open and transparent and all the stakeholders should be engaged in the development and use of the standards. Licensing models should also be addressed. • Development of an “Industrie 4.0 community” with members from several different companies that feels responsible for the technical implementation of the reference architecture and is able to roll it out and maintain it in the longer term. This will require a suitable licensing model and an appropriate community process to be chosen. • Other tasks forming part of the Working Group’s remit would include moderation, recommendations, evaluation, communication and motivation.

The Working Group also recommends the establishment of appropriate flagship projects to demonstrate the successful development and deployment of reference architectures. Figure 11 provides an example of a possible reference architecture focused on horizontal integration through value networks. Other topics for reference architectures could include end-to-end engineering of products and their associated manufacturing systems or real-time process communication for the management and control of highly dynamic technological manufacturing processes.

5.2 Managing complex systems Products and their associated manufacturing systems • Planning models provide transparency with regard are becoming more and more complex. This is a result of to the creative value-added generated by engineers increasing functionality, increasing product customisa- and thus make it possible for complex systems to tion, increasingly dynamic delivery requirements, the in- be built. An example of a planning model would be creasing integration of different technical disciplines and a schematic used by an engineer to explain how he organisations and the rapidly changing forms of coop- or she has implemented appropriate functions to eration between different companies. meet the requirements placed on a system. As Modelling can act as an enabler for managing this grow- such, the model contains the engineer’s knowl- ing complexity. Models are a representation of a real or edge. hypothetical scenario that only include those aspects • Explanatory models describe existing systems in that are relevant to the issue under consideration. The order to acquire knowledge about the system use of models constitutes an important strategy in the through the model. This typically involves using digital world and is of central importance in the context different analysis processes such as simulation. For of Industrie 4.0. example, a simulation can be used to calculate a factory’s energy consumption. Explanatory models A fundamental distinction can be drawn between two are often used to validate engineers’ design types of model: choices.

42 Industrie 4.0 5 Recommended actions The digital world thus exerts a significant influence over duction is running smoothly, detect wear and tear with- real-world design via planning models, whilst the real out needing to halt production or predict component world also influences the models used in the digital failure and other disruptions. world via explanatory models.1 The fact that models usually contain formal descrip- Challenges tions means that they can be processed by computers, Particularly in SMEs, it is still not standard practice to allowing the computer to take over routine engineering use model-based simulations in order to configure tasks such as performing calculations or other repeti- and optimise manufacturing processes. One major tive jobs. One of the benefits of models is therefore challenge for Industrie 4.0 will therefore be to raise that they allow manual activities to be automated and awareness of models’ potential among the wider engi- enable actions to be performed in the digital world that neering community and equip engineers with meth- previously had to be performed in the real world. ods and tools for using appropriate models to depict real-world systems in the virtual world (see Chapter Models offer huge potential – and not only in the con- 5.6). There are some scenarios (e.g. chemical interac- text of Industrie 4.0. For example, they allow the risks tions during production) where suitable models sim- involved in a project to be reduced through early detec- ply do not exist or where it is hard to describe them in tion of errors or early verification of the demands placed a formal model. on the system and the ability of proposed solutions to The explicit development of models for Industrie 4.0 will meet these demands. Or they can provide a transpar- initially involve a higher financial outlay than approaches ent information flow that enables more efficient engi- that do not explicitly use modelling. This is because a neering by improving interdisciplinary cooperation and value-added activity is being brought forward to an ear- facilitating more consistent engineering data. lier stage in the process in order to reduce costs later Explanatory models that describe interactions and be- on. This immediately raises the question of whether mod- haviours in the real world are not only useful for valida- elling is cost-effective. The answer is obviously very de- tion purposes during the development and design pendent on the type of business in question. Companies stages. In the future, they will be primarily deployed are likelier to accept higher initial investment levels in in- during the production stage in order to check that pro- dustries with high production volumes

Figure 11: Example reference Customers Customer ISV Partner architecture for a CPS platform Marketplace portal (public) Self-service portal Aggregation Identity & access mgmt Provider / service Customer billing Product management platform (AAA, SSO) management Reporting Customer management Settlement of eApp Service provisioning provider accounts y z x ERP MES CRM Virtual

Service Service Service Service

Basic Remote Desktop Services

services integration integration Manufacturer-specific MSB eApps Basic Integration MSB: Integration platform, workflow management

(Services, API) services Application platform Data Multi-tenant, shared central databases development Research and backbone Secure Private Platform Source: Hewlett-Packard 2013

Industrie 4.0 43 5 Recommended actions (such as the automotive industry) or industries with strin- qualified in this area are largely regarded as “oddballs”. gent safety standards (such as the avionics2 sector). Finally, a holistic approach should be adopted to the They are less likely to do so if they only manufacture “introduction” of modelling for Industrie 4.0. Firstly, it small volumes or make individual products. The percent- will be necessary to take the product and manufac- age of costs associated with customer-specific activities turing system into account, both in terms of equip- vs. customer-independent activities also plays an impor- ping them with a modular design and ensuring the in- tant role in this regard. It is key to the success of models volvement of different disciplines (e.g. manufacturing that they should be developed cost-effectively and that engineering, automation engineering and IT). Second- they should be used productively not just during the de- ly, the actual development, engineering and manufac- sign stage but also in the subsequent stages, including turing processes occurring in the factory will also operation. have to be considered on a case-by-case basis. Last- Modelling and simulation can only be carried out by ly, modelling requires efficient software tools that will qualified experts. It is therefore important that the rel- have to be optimised and adapted to provide the nec- evant companies should provide these experts with the essary functionality, enable them to be integrated with appropriate career opportunities. Currently, employees existing tools and processes, and bring them into line of SMEs in the mechanical engineering sector who are with the roll-out strategy.

Recommended actions

The Industrie 4.0 Working Group recommends the establishment of a Working Group under the auspices of the Industrie 4.0 Platform to deal exclusively with the topic of modelling as a means of managing complex systems, particularly in the realm of manufacturing engineering. The Working Group’s remit should include the following tasks:

• A representative survey should be carried out to establish the most pressing requirements in the field of modelling, in order to narrow down this very broad subject area to the most important aspects in terms of implementation. • Best practice sharing should be carried out, particularly among SMEs, in order to promote the fundamental importance of modelling among both practitioners and decision-makers. Potential themes could include modularisation, virtual start-up or digital plant. In addition, appropriate events should be arranged to enable discussion of entry barriers and migration strategies (cf. the request for more information expressed in the survey conducted by the professional associations, Chapter 2). Moderation should also be provided for communities and expert pools that would act as a one-stop shop for answering questions about modelling from (potential) users. • The Working Group should encourage the establishment of common user groups for tool users, tool manufacturers (product managers, architects) and trainers with a view to participants gaining a better mutual understanding of each other’s situations. As the leading suppliers under the Industrie 4.0 initiative, the focus should be on the “machinery and plant manufacturing” target user group, in order to provide tool manufacturers with a platform for optimally addressing their requirements (e.g. in relation to integration, end-to-end capability, shortcomings and potential). It would be desirable to invite existing user groups for specific engineering tools to provide their input on the relevant topics. • In addition, the Working Group should work on the development of the appropriate guidelines and recommended actions.

44 Industrie 4.0 5 Recommended actions

In addition to the activities of the Platform, targeted efforts should be made in terms of training and continuing professional development provision with regard to modelling and systems engineering. This includes both appropriate training provision for young engineers and appropriate CPD measures for experienced engineers. Training content should be specifically geared towards the requirements of manufacturing companies (see Chapters 5.5 and 5.6). The Working Group also recommends the establishment of the appropriate flagship projects to deploy and test existing modelling methods and tools in order to demonstrate the value of modelling in different situations (engineering vs. operation, mass production vs. small volumes or individual products, manufacturing industry vs. process industry, in-house vs. inter-company, production vs. logistics, etc).

5.3 Delivering a comprehensive broadband infrastructure for industry If CPS are rolled out on a widespread basis, it will in • Provision of widely available/guaranteed traffic general terms be necessary to build an infrastructure capacity (fixed/guaranteed broadband) that enables significantly higher-volume and higher-qual- • SMS delivery status notification across all mobile ity data exchange than provided by current communica- network operators tion networks. A core requirement for Industrie 4.0 is • Standardised Application Programming Interfaces therefore the enhancement of existing communication (APIs) for provisioning covering all providers (SIM networks to provide guaranteed latency times, reliability, card activation/deactivation) quality of service and universally available bandwidth. In • Tariff management keeping with the recommendation of the National IT • Cost control of mobile service contracts Summit presented in the 2011 Digital Infrastructure • Quality of service (fixed bandwidth) Yearbook, broadband Internet infrastructure needs to be • Affordable global roaming expanded on a massive scale, both in Germany and be- • Widely available embedded SIM cards tween Germany and its manufacturing partner coun- • Satellite-based solutions for areas with no recep- tries.3 tion [N.B. in sparsely populated areas].”

“High operational reliability and data link availability are This basic infrastructure is required not just for Indus- crucial for mechanical engineering and automation en- trie 4.0 but for all CPS applications, including those in gineering applications. Guaranteed latency times and the areas of energy and healthcare (see Chapter 2.1). stable connections are key, since they have a direct impact on application performance. […] Network opera- Challenges tors should do more to meet the wishes of businesses. The overall requirements for an effective broadband infrastructure that is accessible to a large number of us- • Binding and reliable SLAs (Service Level Agree- ers are simplicity, scalability, security, availability and ments) affordability. • Availability and performance of traffic capacity • Support for data link debugging/tracing, especially provision of the relevant technical aids

Industrie 4.0 45 5 Recommended actions

Recommended actions

The Industrie 4.0 Working Group strongly recommends implementation of the recommendations for expand- ing Germany’s broadband Internet infrastructure proposed by Working Group 2 “Digital Infrastructure” at the 2011 National IT Summit. It will be necessary to carry out studies of concrete applications in order to establish the exact bandwidths and real-time capabilities required for Industrie 4.0.

In accordance with the recommendations of Working Group 2, the Industrie 4.0 Working Group also recommends expansion of Germany’s broadband Internet infrastructure.

5.4 Safety and security as critical factors for the success of Industrie 4.0 Safety and security are two key aspects with regard manufacturing systems involve highly networked sys- to manufacturing facilities and the products they tem structures incorporating large numbers of human make (see info panel). On the one hand, they should beings, IT systems, automation components and ma- not pose a danger either to people or to the environ- chines. High-volume and often time-critical data and ment (safety), whilst on the other both production fa- information exchange occurs between the technologi- cilities and products – and in particular the data and cal system components, many of which act autono- know-how they contain – need to be protected mously. At the same time, a far greater number of ac- against misuse and unauthorised access (security). tors is involved across the value chain (see Chapters 2 In contrast to security, safety issues have been an and 3). However, safety and security are always prop- important consideration in the design of manufactur- erties of the entire system. Thus, in addition to opera- ing facilities and the products they make for many tional safety issues, the extensive networks and at least years. Safety is regulated by a whole host of regula- hypothetical potential for third-party access mean that tions and standards governing the construction and a whole new range of security issues arise in the con- operation of such systems.4 text of Industrie 4.0. It will only be possible to imple- Since information technology first came into contact ment Industrie 4.0 and get people to accept it if the with mechanics and electronics towards the end of following points are put into practice: the 1960s (Industrie 3.05) there has been a dramatic increase in safety and security requirements in the 1. Security by Design as a key design principle. In manufacturing environment. In addition to the fact the past, security against external attacks was usu- that it became far more complex to provide hard evi- ally provided by physical measures such as access dence of operational safety, it gradually became ap- restrictions or other centralised security measures. In parent that security was also a problem. Many of the CPS-based manufacturing systems, it is not enough safety and security issues that arose in Industrie 3.0 simply to add security features on to the system at (the “beta version” of Industrie 4.0) have yet to be some later point in time. All aspects relating to safety, fully resolved. Security measures in particular are of- and in particular security, need to be designed into ten slow to be implemented and frequently only pro- the system from the outset. vide partial fixes. With the advent of Industrie 4.0, a 2. IT security strategies, architectures and stand- number of additional safety and security require- ards need to be developed and implemented in ments are set to arise. Industrie 4.0’s CPS-based order to confer a high degree of confidentiality, integ-

46 Industrie 4.0 5 Recommended actions rity and availability on the interactions between these availability) and vice versa (“does a particular critical highly networked, open and heterogeneous compo- safety function of a subsystem increase the risk of nents. They also need to provide an appropriate, reli- cyber-attacks?”). able and affordable solution for protecting the digital Furthermore, in view of the current situation, a dual process know-how, intellectual property rights and strategy is also required for Industrie 4.0 with regard to data in general of each individual manufacturer and safety and security. Firstly, existing factories will have to operator, both vis-à-vis the outside world and with be upgraded with the safety and security measures regard to components belonging to different opera- needed to meet the new requirements. The typically tors and/or manufacturers vis-à-vis each other (see long service lives of machinery and short innovation cy- also Chapter 5.7). cles, together with heterogeneous and in some cases very old infrastructures that are difficult to network In Industrie 4.0, it is therefore always necessary to mean that this will not be an easy task. Secondly, solu- adopt a global approach to safety and security. It is tions for new factories and machinery will have to be essential to consider the impact of security measures developed. The transition from the third to the fourth (cryptographic processes or authentication proce- industrial revolution should be as seamless as possible dures) on safety (time-critical functions, resource and should be implemented in a way that can be clearly

“Safety” refers to the fact that technological systems (machines, production facilities, products, etc) should not pose a danger either to people or to the environment, whilst “security” refers to the fact that the system itself needs to be protected against misuse and unauthorised access (access protection, security against attacks, data and information security). Various aspects of safety and security are relevant to Industrie 4.0, making it essential to draw a clear distinction between the two terms:

Security/IT security/cyber-security: The protection of data and services in (digital) systems against misuse, e.g. unauthorised access, modification or destruction. The goals of security measures are to increase confidentiality (the restriction of access to data and services to specific machines/human users), integrity (accuracy/completeness of data and correct operation of services) and availability (a means of measuring a system’s ability to perform a function in a particular time). Depending on the technological system in question and the data and services that it incorporates, security provides the basis for information privacy, i.e. the protection of individuals against infringements of their personal data rights. It also enables know-how protection, i.e. protection of intellectual property rights.

Safety: The absence of unacceptable risks and threats to people and the environment resulting from operation of the system. “Safety” requires both operational safety and a high degree of reliability. Depending on the technological system in question, safety may also involve additional aspects such as prevention of mechanical or electrical hazards, radiation protection, prevention of hazards relating to steam or high pres- sure, etc. Operational safety refers to the aspects of safety that are dependent on the correct operation of the system or that are provided by the system itself. The elements required to deliver operational safety include low fault rates, high fault tolerance (i.e. the ability to keep operating correctly even when faults occur) and robustness (the ability to guarantee basic functionality in the event of a fault). Reliability refers to the probability of a (technological) system operating correctly for a given period of time in a given environment.

Industrie 4.0 47 5 Recommended actions understood by all the relevant stakeholders. One key ware, resulting in a sharp rise in the number of software aspect for both pillars of the strategy is for all the actors components found in manufacturing facilities and ma- throughout the entire value chain to reach a consensus chinery. However, too little is often still known about the on safety and security issues and the relevant architec- relevant IT threats. Industrial IT security has only started ture before implementation begins. to be discussed in the automation industry since the public debate surrounding malware such as Stuxnet, Challenges Duqu or Flame. Moreover, software is also playing an There are a variety of different challenges facing safety increasingly important role in delivering and maintain- and security in the context of Industrie 4.0. Quite apart ing security and safety, but this is something that has from the technical challenges, successful safety and not yet been properly taken on board by manufacturing security solutions will also have to address commercial, processes – and where solutions are available they psychological and educational issues. For example, in- have yet to be implemented. dustry currently lacks fully standardised operating plat- In general terms, Industrie 4.0 will require a much more forms for implementing adequate safety and security proactive approach to safety and security than has hith- solutions that have been tailored to the specific require- erto been the case (especially with regard to security ments of industry in terms of their implementation and by design). At the moment, safety and security issues cost so that they do not merely become regarded as are often only raised reactively once the development cost drivers. There is often little that can be done to process is over and specific safety or security prob- expand or upgrade existing infrastructure, especially lems have already occurred. However, this belated im- since many safety and security solutions were originally plementation of safety and security solutions is both developed for other industries or applications. Moreo- costly and also often fails to deliver a permanent solu- ver, security awareness often plays a key role, particu- tion to the relevant problem. Consequently, safety and larly with regard to IT security issues. There are cur- security cannot simply be broken down into functional rently too many discrepancies regarding the level of components but should instead be approached as a security awareness in different industries. In view of the process. In order to achieve fast response times, it is fact that Industrie 4.0 will involve increased networking also important to provide support through monitoring and cooperation between several different partners in a and comprehensive cross-sectoral information ex- value chain, it will be necessary for partners to have a changes. At the moment, there is insufficient monitor- higher level of confidence in each other’s competence ing of risk assessment indicators, particularly with re- (security & trust) and for them to provide hard evidence gard to industrial IT security, and little if any information of their competence. is exchanged about safety and security incidents. Ac- Machinery and plant manufacturers are becoming in- tion in these areas would help to stop the spread of vi- creasingly aware of the value-added potential of soft- ruses or indiscriminate cyber-attacks.

48 Industrie 4.0 5 Recommended actions

Recommended actions

As part of its study of cyber-security issues, the Federal Office for Information Security (BSI) drew up a list6 of the top 10 most critical threats currently facing Industrial Control Systems (ICS). The Industrie 4.0 Working Group has worked together with a number of experts to produce a complementary list of eight priority areas for action in the field of safety and security:

1. Integrated safety and security strategies, architectures and standards Industrie 4.0 will require modified safety and security strategies, together with systematic application of the relevant principles and methods throughout the entire system life cycle. A common “knowledge pool” should be developed as a basis for this approach. This would enable the strategies and processes currently used in the process automation and mechanical and electrical engineering industries to be enhanced by adapting the safety and security strategies and processes employed by the IT, automotive and aerospace industries to the specific requirements of Industrie 4.0.

• Research is needed to develop safety and security strategies for hypothetically open, collaborative subsystems belonging to different manufacturers and operators. These strategies should be based on threat scenarios that could initially be developed for individual sectors such as the mechanical engineering or automotive supply industries, but which would ultimately have to be applicable to all industries. • It is important to ensure that research and development of the relevant strategies and systems is closely coordinated with other safety and security research projects on topics such as secure proof of identity, cyber-security or the protection of critical infrastructure and that knowledge is exchanged with other industries such as the automotive and aerospace industries. • Building on these strategies, safety and security architectures for manufacturing systems should be defined as reference architectures for the Industrie 4.0 initiative. As far as possible, these should be backwards compatible with existing Industrie 3.0 systems.

In addition to ensuring the standardisation of approaches and procedures that is key to the success of In- dustrie 4.0, these reference architectures would also enable test procedures to be defined and testing facilities to be established that could be used to test the overall safety and security of systems at every level, from the individual machine to networks of machines and the application stage. The reference architectures could also serve as a basis for issuing security classifications and certificates to new and especially to existing subsystems. This approach would thus form part of the migration strategy.

2. Unique and secure IDs for products, processes and machines Secure information exchange throughout the entire manufacturing process is key to the acceptance and success of Industrie 4.0. This applies to machines, their components, the data being exchanged, the affected processes and the organisational units involved. To enable this exchange, it is necessary for the individual machines, processes, products, components and materials to possess unique electronic IDs. Fur- thermore, it would be desirable to issue components with a kind of “security passport” containing details of the risks that were already taken into account and counteracted during development and the risks that need to be considered by the integrator, installer, operator or user. The passports would also contain the security classification referred to above.

Industrie 4.0 49 5 Recommended actions

As part of a secure ID, these passports could form the basis of a system for rating the overall security of a CPS in the manufacturing environment, both during its development and during production itself. The security rating would take into account the value of the product, the potential threats and the modified or appropriate coun- termeasures. The strategic initiative on “Secure Identities” should thus be expanded to include “products”, “machines” and “processes” and should incorporate virtual products as well as physical ones.

3. A migration strategy from Industrie 3.0 to Industrie 4.0 The goal of a migration strategy would be to gradually improve the security of current Industrie 3.0 facilities (which are likely to remain in use for some considerable time) and prepare them for conversion to Industrie 4.0. However, the heterogeneity, long service lives and individual nature of existing manufacturing facilities all hamper the development of common standards for IT security solutions. Consequently, in addition to the abovementioned assessment of the current status of existing facilities, a migration strategy will also require the development of a standardised process model that enables individual security solutions to be implemented rapidly, pragmatically and cost-effectively. This process could be arrived at by adapting existing (generic) IT security processes, based on the definition of individual security goals, a situation analysis in order to identify weaknesses and threats and the subsequent establishment of a list of measures which would then be implemented.

4. User-friendly safety and security solutions People tend to avoid using processes and applications that are not user-friendly. This can have fatal conse- quences for safety and security solutions, especially in a highly networked environment. It is therefore necessary to develop safety and security solutions that are geared towards users’ needs, possess user-friendly interfaces and therefore guarantee execution of the application in question. These factors should be taken into account from the initial design phases through engineering and operation right up to and including maintenance.

5. Safety and security in a business management context Inevitably, safety and security are always going to be cost factors. When machinery breaks down, there can be both a direct impact (e.g. lower turnover) and an indirect impact (e.g. compensation claims from customers, suppliers and partners or damage to the company’s image). However, until now few manufacturers have taken out insurance against damage caused by IT issues. It is therefore necessary to develop methods that will enable clearer calculation of the risks associated with Industrie 4.0 and the cost-effectiveness of the relevant security solutions as opposed to the alternative of shutting down manufacturing facilities in the event of a real or suspected IT threat.

6. Secure protection against product piracy Successful products are inevitably going to be targeted by product piracy. In a global market, intellectual property protection is therefore key to the survival of high-wage economies.7 The problems associated with this phenomenon are not confined to its impact on sales but also include damage to corporate image and loss of know-how. In the most extreme cases, erstwhile pirates can even become competitors. Moreover, the problem is no longer restricted to the often rather complex physical replication of products – the targeted theft of corporate and product know-how is now also becoming increasingly common, especially in the form of software or configurations that are currently still easy to copy.

50 Industrie 4.0 5 Recommended actions

Protection against product piracy assumes even greater importance in Industrie 4.0 in view of the much higher degree of cooperation between the different partners in the value network. It is therefore necessary to work at a technical level and in particular at the corporate and competition law levels to find solutions that guarantee trust and transparency within the platform whilst at the same time protecting critical business know- how.

7. Training and (in-house) CPD A knowledge of IT security issues is essential for all the members of an organisation. It is crucial to raise awareness among all the people involved in production, from skilled machine operators to security software developers and planning engineers working in the field of plant engineering. When security solutions are implemented in a business, it is not enough simply to install a technical product, even if it is user-friendly (see point 4) – employees also need to be adequately trained with regard to the relevant security requirements. Appropriate awareness-raising campaigns targeted at the manufacturing environment could help to overcome the current shortcomings in this area, whilst the introduction of compulsory classes on this topic at higher education institutions would help prepare the workforce of the future (see also Chapter 5.6).

8. “Community building” for data protection in Industrie 4.0 Industrie 4.0 will require tougher data protection arrangements, for example because it will be technically possible to record and analyse information about employees’ health via the machines in smart factories or through smart assistance systems. The use of personal information is an especially sensitive issue in Ger- many, where there is much focus on the right to informational self-determination. Consequently, it is recommended that the topic of data protection should be addressed in close cooperation with the strategic initiative on “Secure Identities”, the Federal Office for Information Security (BSI), the Federal and regional Data Protection Commissioners and the trade unions and company works councils (see Chapter 5.7).

The Industrie 4.0 Platform will need to engage in an in-depth discussion in order to establish priorities with a view to drawing up a roadmap or producing a list of requirements. When envisaging the optimal solution for Industrie 4.0, it will be important to consider not just how to deliver secure communication between machines and components but also the inherent security of individual machines. It is recommended that the focus should be on pragmatic solutions that can be promptly implemented in existing facilities without having to wait for the longer-term “ideal” solutions to be developed (see Chapter 2.1).

Germany is a world leader in both complex IT security solutions and in the field of safety, whilst Germany’s safety and security experts enjoy an excellent reputation right across the globe. However, conventional IT security products are predominantly produced in other countries such as the US and Israel. In parallel to the development of CPS and CPS products, Germany has an opportunity to build its own security industry for Industrie 4.0, drawing on the competitive advantage provided by its specific know-how in manufacturing and automation processes, mechatronic engineering and embedded systems. It will be important to act swiftly to ensure that this advantage is used to its full potential in Industrie 4.0.

Industrie 4.0 51 5 Recommended actions » Industrie 4.0 will require the development of technological and organisational solutions that are adapted to the needs of small and medium-sized enterprises. It will be necessary to take advantage of the specialist know-how within businesses. Worker-friendly work organisation and workplace-based training will be key to its implementation.« Dr. Georg Schütte Federal Ministry of Education and Research State Secretary

5.5 Work organisation and work design in the digital industrial age What impact will Industrie 4.0 have in the workplace? The remit of innovation needs to be consistently wid- What responsibilities will have to be met by business- ened to include smart organisation of work and em- es and society in a decentralised high-tech economy ployees’ skills, since employees will play a key part in where CPS are commonplace? How should the implementing and assimilating technological innova- world of work respond to these changes? In a future tions. It is likely that their role will change significantly characterised by increasing automation and real-time as a result of the increase in open, virtual work plat- oriented control systems, how can we ensure that forms and extensive human-machine and human-sys- people’s jobs are good, safe and fair? The answers tem interactions. Work content, work processes and to these questions will determine whether or not it is the working environment will be dramatically trans- possible to mobilise existing reserves of innovation formed in a way that will have repercussions for flexi- and productivity and secure a competitive advantage bility, working time regulation, healthcare, demograph- through the widespread deployment of automatically ic change and people’s private lives. As a result, in controlled, knowledge-based, sensor-equipped man- order to achieve successful integration of tomorrow’s ufacturing systems. technologies they will need to be smartly embedded Innovation efforts cannot be allowed to focus exclu- into an innovative social organisation (within the work- sively on overcoming the technological challenges. place).

52 Industrie 4.0 5 Recommended actions Challenges It is very likely that the nature of work in Industrie 4.0 alised of its own accord. It will be crucial to employ will place significantly higher demands on all members work organisation and design models that combine a of the workforce in terms of managing complexity, ab- high degree of individual responsibility and autonomy straction and problem-solving. Employees will also be with decentralised leadership and management ap- expected to be able to act much more on their own ini- proaches that allow employees greater freedom to tiative and to possess excellent communication skills make their own decisions, be more involved and regu- and the ability to organise their own work. In short, late their own workload, whilst at the same time also greater demands will be placed on employees’ subjec- enabling flexible working arrangements. tive skills and potential. This will provide opportunities It is possible to use the technology for very different in terms of qualitative enrichment of their work, a more ends. Systems can be set up to impose restrictive con- interesting working environment, greater autonomy and trol over every minute detail of a person’s work, or they more opportunities for self-development. can be configured as an open source of information Nevertheless, the demands of the new, virtual work- that employees use as a basis for taking their own deci- place also present a threat to the maintenance and sions. In other words, the quality of people’s work will safeguarding of human capital. As the degree of tech- not be determined by the technology or by any techno- nological integration increases, there is a danger of em- logical constraints but rather by the scientists and man- ployees being required to be more flexible and perform agers who model and implement smart factories. more demanding tasks, as well as a growing tension It is therefore necessary to adopt a socio-technical between the virtual world and the world of workers’ approach where work organisation, continuing pro- own experience. This could result in workers experienc- fessional development measures and technology and ing a loss of control and a sense of alienation from their software architectures are developed in close con- work as a result of the progressive dematerialisation junction with each other to provide a single, consist- and virtualisation of business and work processes. It is ent solution focused on enabling smart, cooperative also possible that “old” and “new” threats could com- and self-organised interactions between employees bine to take on a new dimension, resulting in significant and/or technology operating systems across the en- creativity and productivity losses and a tendency for tire value chain. employees to overwork themselves. Finally, it is important to consider the impact that the “Better, not cheaper” as an opportunity and increasing presence of IT in manufacturing industry benchmark for industrial change will have on headcount. It is likely that the number of This socio-technical approach argues that adopting an simple manual tasks will continue to decline. This even more extreme version of the Taylorist approach to could pose a threat to at least some employee groups, work organisation based on frequent repetition of highly notably semi-skilled workers. Such a scenario would standardised and monotonous tasks is hardly the most be unacceptable both for the employees themselves promising way to go about implementing the Industrie and from the wider public’s point of view in terms of 4.0 initiative in partnership with employees in a way that the social inclusion dimension. Moreover, it would se- allows new efficiency gains to be achieved. The fact that riously hamper the successful implementation of the smart factories will be configured as highly complex, dy- Industrie 4.0 initiative. namic and flexible systems means that they will need employees who are empowered to act as decision-mak- A consistent approach to technology and work ers and controllers. For this to be possible, they will organisation need to be supported by customer-oriented job profiles Smart factories provide an opportunity to create a new requiring broad-based training, work organisation mod- workplace culture geared towards the interests of the els that promote learning, and comprehensive continu- workforce. However, this potential will not simply be re- ing professional development that fosters autonomous

Industrie 4.0 53 5 Recommended actions work and is designed as an active instrument for pro- a secure future for manufacturing sites and their em- moting systematic staff development and career ad- ployees. The strategy incorporates a labour-oriented vancement. In Industrie 4.0, technological development organisational design with enhanced participation goals and work organisation models should be estab- rights, co-determination and training opportunities. lished and configured together in accordance with the Nonetheless, it is still capable of meeting the demands specific economic and social circumstances. It will be of global competitiveness and the need for greater flex- necessary to enable more flexible manufacturing whilst ibility. The “better, not cheaper”8 strategy targets tech- at the same time establishing clear boundaries between nology leadership as the basis for securing the future of employees’ work and private lives, enabling them to German industry. Consequently, good jobs, technolog- achieve a realistic work-life balance. ical innovation and worker co-determination are not In this context, the innovation strategy being promoted mutually exclusive in the context of the Industrie 4.0 ini- by the trade unions under the banner of “better, not tiative. Rather, they form part of a forward-looking ap- cheaper” could point the way towards robust stand- proach to the search for technologically efficient solu- ards and pathways for creating good and fair jobs and tions that are also socially sustainable.

Recommended actions

• The Industrie 4.0 Platform should continue to study the issue of “People and Work in Industrie 4.0” through an interdisciplinary expert working group. The working group’s remit should comprise three main goals:

1. To ascertain and document the impact on work and employment (opportunities and risks) together with the actions required to achieve employee-oriented labour and training policies 2. To provide guidelines and practical aids for developing and implementing the socio-technical approach, together with the relevant reference projects 3. To promote innovative approaches to participative work organisation and lifelong learning that embrace the entire workforce, irrespective of age, gender or qualifications

• The Platform should set up a regular dialogue between the social partners to enable transparent identification and discussion of the key advances, problems and potential solutions associated with the implementation of Industrie 4.0.

• The Platform should arrange effective knowledge transfer between stakeholders inside and outside of companies at both national and international levels. In addition to innovative knowledge management, this will also require the establishment of broad-based social networks.

54 Industrie 4.0 5 Recommended actions 5.6 Training and continuing professional development for Industrie 4.0

As described above, the implementation of Industrie studies and place greater emphasis on transferable 4.0 should result in a labour-oriented socio-technical skills such as business or project management. It is factory and labour system. This will in turn pose new businesses and their customers who should drive the challenges for vocational and academic training and changes made to the academic training of IT experts. continuing professional development (CPD). These In keeping with the principles underpinning Industrie challenges include the need to expand provision for 4.0, this will also involve close convergence of IT and the developers of manufacturing engineering compo- production engineering training. The relevant learning nents and their users. content for Industrie 4.0 will thus need to be identified It is likely that Industrie 4.0 will significantly transform and the appropriate didactic and methodological ap- job and skills profiles as a result of two trends. Firstly, proaches will need to be developed. It is possible that traditional manufacturing processes characterised by in particular some of the creative areas of businesses a very clear division of labour will now be embedded such as interdisciplinary product and process develop- in a new organisational and operational structure ment could require completely new qualifications. where they will be supplemented by decision-taking, These would form part of a dual strategy that would coordination, control and support service functions. enable companies to respond to the challenges of a Secondly, it will be necessary to organise and coordi- shrinking labour market and high market volatility. nate the interactions between virtual and real ma- In this context, it will be key to develop professional adult chines, plant control systems and production man- education provision (teaching methods, career profile). agement systems. Skills assessments9 should be used to improve mobil- Effectively, what this means is that the convergence ity between vocational and academic education and be- of ICT, manufacturing and automation technology tween the different training and CPD programmes and and software will result in many tasks now being per- systems, as well as to improve recognition of skills that formed as part of a much broader technological, or- are still relevant in the workplace despite not being con- ganisational and social context. nected to an employee’s specialist area. There is a grow- Industrie 4.0 will also require fundamental changes to ing need for people to have a grasp of the overall context the way IT experts are trained. The ability to identify and to understand the interactions between all the ac- application requirements in different industries and tors involved in the manufacturing process. Consequent- recruit development partners from around the world ly, in addition to increased demand for metacognitive will increasingly take precedence over purely techno- skills, social skills are also gaining in importance owing logical expertise. The extremely wide range of poten- to the growing significance of real-life and computer- tial applications means that there is a limit to what can based interactions resulting from greater integration of be achieved through standardised training pro- formerly demarcated departments and disciplines. In grammes. It will become more and more important to technical terms, much greater emphasis will be placed engage in a dialogue with manufacturing industry in on interdisciplinary skills, an area where much work still order to ensure that the requirements of the digital remains to be done. economy are reflected in training provision. As such, In order to ensure that individuals’ training potential can training partnerships between businesses and higher be recognised and described transparently, it will be nec- education institutions will be even more important in essary to develop standards for the recognition of non- the future than they are today. Short basic training formal and informal education. The goal is to teach peo- programmes will need to be followed by work place- ple the principles of a new, holistic organisational model ments and advanced study courses. It will be impor- and ensure that systems are described transparently so tant to open up access to science and engineering that employees are confident in what they are doing.

Industrie 4.0 55 5 Recommended actions

The Academy Cube The Academy Cube is an initiative that has been launched by German and international industrial enterprises together with public institutions in order to address the need for new training formats and content arising from Industrie 4.0. Current provision specifically targets skilled workers from southern Europe, where unemployment* rates are particularly high. The Academy Cube provides online information to interested parties about how they might be able to use their skills and knowledge both in their home country and abroad. The Academy Cube offers unemployed graduates in ICT and engineering the opportunity to obtain targeted qualifications and helps put them directly in touch with industrial enterprises. This is achieved via a cloud-based platform where companies and institutions provide e-learning courses and post specific job vacancies. The platform helps job seekers to obtain the training they need to apply for specific vacancies, whilst also issuing them with the corresponding certificates. These certificates, that are based on standard curricula, ensure that potential employers can be confident about the standard of the training and provide transparency with regard to its content. The best candidates are automatically directed to the top job vacancies of the participating companies. The Academy Cube concept was developed during the BMBF- and SAP AG-chaired Working Group 6 on Education and Research for the Digital Society at the National IT Summit and was officially launched at CeBIT 2013. Since March 2013, the programme has been offering six full curricula and twelve specific courses in the area of Industrie 4.0. Learning content includes fields such as automation, big data analysis, manufacturing and logistics processes and security and data protection.

More information is available at: www.academy-cube.com

Figure 12: Networking different actors though the 1. Graduates/jobduates/job seseekers Academy Cube find jobs 6. UniversitiesUi iti 2. Students ensure that talented discover new graduatesduates find work career paths

5. Employmentlt agencies 3. Employers provide candidates find highly-skilled 4. Contentontent provideproviders employees find new markets for their training provision Source: Academy Cube 2013

* In 2012, unemployment in Spain stood at 27 percent, whilst youth unemployment in Spain and Greece was as high as 52 percent (Source: Eurostat 2012). The European Commission estimates that by 2015 there will already be a shortage of 700,000 ICT professionals in Europe (Source: European Commission News, 20.3.2012); BITKOM calculates that there is an annual shortfall of 9,000 IT graduates in Germany (Source: BITKOM 2012). 10,100 additional ICT experts are needed in Italy, 18,300 in Poland, 41,800 in Spain and 87,800 in Germany (Source: Eurostat 2012).

56 Industrie 4.0 5 Recommended actions Whilst all the different levels of the training system are tiveness of in-house versus out-of-house learning and affected, special priority should be attached to the ex- general versus vocational education should be the sub- pansion of CPD. In particular, CPD in the workplace ject of further research. should address the importance of health, physical ac- In addition, Industrie 4.0 jobs will be designed to use tivity and lifestyle in ensuring a lengthy working life. technologies such as CPS in order to enhance communication between employees and integrate job sup- By organising work in a way that fosters learning and port, learning tasks and physical training in the work- implementing appropriate training strategies, it should place into the standard working day at suitable intervals. be possible to achieve a human-centric approach to This will require employees’ workload to be monitored manufacturing that takes account of differences in em- on an ongoing basis. ployees’ education, experience and skills sets in a way Job design should also take into account the different that strengthens the innovative capacity of both indi- roles performed by employees (from unskilled and viduals and businesses. The organisation of work in a skilled workers or employees with advanced vocational way that fosters learning is also a key requirement for and technical qualifications to staff members with aca- lifelong learning. In view of the rapid technological demic qualifications such as bachelor’s and master’s changes expected as a result of the introduction of degrees or qualified engineers) as well as differences CPS-based systems, it should therefore also be one of in their circumstances such as age, education, experi- the goals of the smart factory. The comparative effec- ence or cultural background.

Recommended actions

The Industrie 4.0 Working Group recommends the following measures with regard to qualifications, training and CPD in the context of Industrie 4.0: 1. Promotion of model projects Projects should incorporate actions that can be used to develop training and CPD strategies. These should include strategies to promote mobility between vocational and academic training and between different training and CPD courses and systems as well as to recognise additional skills that employees possess outside their specific area of expertise. 2. Establishment and promotion of “best practice networks” In order to guarantee knowledge transfer and sustainability, training and CPD “best practice networks” should be established by competitive tender. These networks would be charged with developing and documenting case studies, networking the various actors and supporting knowledge transfer. 3. Investigation of new approaches to knowledge and skills acquisition in the workplace, development of digital learning techniques Digital media and innovative learning technologies (e-learning) will play a prominent role in knowledge transfer and skills development. In view of technological and demographic change and the fact that different learners have different requirements, it will be necessary to develop new teaching methods and learning assistance systems. 4. Promotion of cross-cutting approaches to work organisation All Industrie 4.0 qualification, training and CPD measures will need to be accompanied by comprehensive research in the shape of research and implementation partnerships.

Industrie 4.0 57 5 Recommended actions

It will be of fundamental importance to investigate issues relating to work organisation, process design, management and cooperation, together with their impact on the evolution of work and training in Industrie 4.0. This should also include the issue of how older workers can retain their employability against a back- drop of increased life expectancy. In order to organise work in a way that fosters learning, it will be necessary to develop the appropriate training strategies, analysis methods and management models. Overall, this will present a number of significant challenges for training and CPD, including the need for comprehensive continuing professional development provision and changes to at least some parts of the training system. 5. Promotion of Industrie 4.0-specific learning content and interdisciplinary cooperation It will be necessary to promote interdisciplinary cooperation between all disciplines (e.g. manufacturing engineering, automation engineering and IT) to deliver a systems engineering approach. This will require the different disciplines to acquire a mutual understanding of each other’s positions and approaches and to adopt an integrated view of strategy, business processes and systems. Interdisciplinary research will also be necessary at the interface between technology and the law. Legal experts should be involved from the early stages of the R&D process. By the same token, engineers will increasingly need to acquire a basic understanding of the legal issues so that they can engage in a full dialogue with their legal counterparts. 6. IT-based modelling of technological systems This includes modelling of the interaction between the real and digital worlds, including the appropriate formal descriptions, as well as methodological aspects such as modelled mechatronic engineering or contemplating the development of adaptations to existing systems (delta engineering) as opposed to developing completely new systems from scratch.

5.7 Regulatory framework Just like any other fundamental technological innova- issues. Two things are required to reconcile regulation tion, the new manufacturing processes associated with and technology: the formulation of criteria to ensure Industrie 4.0 will find themselves confronted with the that the new technologies comply with the law and de- existing regulatory framework, a situation that raises velopment of the regulatory framework in a way that two interconnected challenges. On the one hand, un- facilitates innovation. In the context of Industrie 4.0, it certainty regarding the legality of a new technology or will often be possible to achieve this through common the associated liability and data protection issues could law contracts. Both factors require the regulatory anal- inhibit its acceptance and slow down the innovation ysis of new technologies to begin as early as possible process. Conversely, the de facto power of new tech- during the R&D phase rather than being left until they nologies and business models can be so great that it are already in use. becomes almost impossible to enforce existing legislation. Consequently, short technological innovation cy- Challenges cles and the disruptive nature of new technologies can 1. Protecting corporate data result in the danger of a chronic “enforcement deficit” As the Internet of Things becomes established in whereby current regulation fails to keep pace with tech- smart factories, both the volume and the level of detail nological change. of the corporate data generated will increase. Moreo- While Industrie 4.0 does not, on the whole, tread com- ver, business models will no longer involve just one pletely uncharted regulatory territory, it does signifi- company, but will instead comprise highly dynamic cantly increase the complexity of the relevant regulatory networks of companies and completely new value

58 Industrie 4.0 5 Recommended actions chains, as demonstrated by the RAN Project10, for ex- fore necessary to develop new contractual models that ample. Data will be generated and transmitted auton- allow businesses to retain sovereignty over “their” data omously by smart machines and these data will inevi- whilst still facilitating entrepreneurial flexibility. tably cross company boundaries. A number of specific dangers are associated with this new context – for 2. Liability example, data that were initially generated and ex- When sensitive data are exchanged between different changed in order to coordinate manufacturing and lo- companies, there is a risk that they may be used and/or gistics activities between different companies could, if disclosed illicitly, or that they may be hacked by third read in conjunction with other data, suddenly provide parties if, for example, the recipient fails to implement third parties with highly sensitive information about adequate IT security measures. One solution to this one of the partner companies that might, for example, problem is provided by a type of contractual clause al- give them an insight into its business strategies. New ready in widespread use that sets out the requisite instruments will be required if companies wish to pur- technical and organisational arrangements and any ad- sue the conventional strategy of keeping such knowl- ditional measures (e.g. the duty to provide notification edge secret in order to protect their competitive ad- of any security problems or breaches) and stipulates vantage. New, regulated business models will also be penalties in the event of non-compliance. However, in necessary – the raw data that are generated may con- Industrie 4.0 manufacturing facilities are responsible tain information that is valuable to third parties and for a wider range of matters than in the past. They may companies may therefore wish to make a charge for now be subject to a liability action not only if they fail to sharing them. Innovative business models like this will meet their primary responsibilities (in terms of the prod- also require legal safeguards (predominantly in the uct’s durability, correct operation and appearance), but shape of contracts) in order to ensure that the value- also for failings in their role as part of a network of smart added created is shared out fairly, e.g. through the objects. use of dynamic pricing models. In these scenarios, the issue of liability and responsibil- Current regulation of the protection of corporate data ity becomes even more important – when autonomous only addresses some aspects of these dangers and systems are deployed in networks, a lack of structural generally requires the data to be classified as business transparency could make it almost impossible to explic- or trade secrets. Furthermore, it usually only applies to itly determine who performed a particular action, result- cases of illegal disclosure. As a rule, confidential infor- ing in uncertainty with regard to legal liability. It is true mation that has been acquired legally, e.g. with the per- that businesses employing manufacturing systems that mission of its owner, may subsequently be used for use autonomous data processing are legally liable for other purposes. However, self-regulation such as confi- the security of their manufacturing facilities and prod- dentiality agreements should make it possible to close ucts vis-à-vis third parties. Current tort and product lia- these legal loopholes. Contract law offers a means of bility law already provides adequate solutions in this achieving highly specific regulation of a variety of differ- area. However, if the other partners in a network wish to ent scenarios. This will require the sensitivity of the data avoid being held jointly liable, or if they want at least to and the degree of protection needed to be determined have recourse against the other partners, then it is es- on a case-by-case basis – under certain circumstanc- sential for their responsibilities to be contractually stip- es, individual data protection law principles could pro- ulated from the outset and/or for actions to be clearly vide a model in this regard. attributed to the owners of the respective systems. This However, contracts do have their limitations when it also has implications for the insurability of residual risk comes to managing large volumes of voluntary legal ar- and the way that the insurance industry calculates the rangements, since a disproportionately large amount of relevant premiums. work is involved in calculating the risks and negotiating Correct attribution of liability will be facilitated by the pro- separate contracts for each individual case. It is there- vision of precise documentary evidence concerning the

Industrie 4.0 59 5 Recommended actions different manufacturing steps and system statuses (al- would be important to ensure that these did not under though highly detailed protocol data relating to specific any circumstances undercut existing data protection individuals could cause data protection law problems). standards. In any event, these instruments would need Consequently, technology-based documentation proce- to be adapted to take account of the specific charac- dures such as personal or device-based digital signa- teristics of Industrie 4.0. tures will play a far more important role in Industrie 4.0. The data protection law requirements for custom product features will depend on the product and application 3. Handling personal data in question. One issue that is especially relevant to In- As the interaction between employees and CPS industrie 4.0, for example, is the incorporation of data pro- creases, so will the volume and level of detail of the cessing components into the end product. Whilst these personal data held for individual employees. This is es- components may initially be used during the manufac- pecially true of assistance systems that record informa- turing process, they may eventually come into the pos- tion about an employee’s location, their vital signs or session of end customers who use them for purposes the quality of their work. This issue could pose a threat for which they were not originally intended. In order to to employees’ right to informational self-determination. prevent this from happening and restrict the kind of data Scenarios with an international dimension are particu- processing that the built-in components can be used larly problematic in this regard. German data protection for, their capabilities should be confined to what is law places strict restrictions on the outsourcing of the strictly necessary as defined by data protection law. analysis of data captured in smart factories to companies located outside the European Union (EU) or Euro- 4. Trade restrictions pean Economic Area (EEA) (including companies be- As more and more complex systems are deployed in longing to the same group) or the disclosure outside Industrie 4.0, it becomes increasingly likely that indi- Europe of corporate data containing personal informa- vidual components may be subject to national and in- tion about employees. This restriction is particularly ap- ternational trade restrictions. Encryption technologies plicable if data protection standards in the country re- are both necessary and desired by customers in order ceiving the data are lower than those found in Europe. to ensure the confidentiality and integrity of CPS com- This could result in problematic constraints for globally munication. However, in many emerging markets, such networked value chains. as China, the use, sale, importing and exporting of en- Current regulation fails to adequately address these cryption products are only permitted under licence. In problems. Outsourced data processing models are al- the EU, on the other hand, shipment of encryption ready encountering difficulties (e.g. in the realm of technologies is allowed within Europe and to certain cloud computing), since local data protection stand- other countries such as Japan, Canada and the US, ards are generally not applicable in countries outside of but they are classed as dual use goods11 and subject Europe, meaning that in practice it is impossible for cli- to export restrictions for many other destinations. ent companies to comply with their data protection re- Even today, companies wishing to have a global pres- sponsibilities. ence in tomorrow’s key markets are to some extent Businesses therefore have a growing need for a legally already finding themselves forced to operate in legal unambiguous and practical solution for handling per- grey areas if cryptographic components are built into sonal data. It may be possible, up to a point, to achieve larger manufacturing facilities. This legal uncertainty this through in-house binding corporate rules, collec- will only increase in Industrie 4.0 and could become a tive agreements and company agreements, although it significant barrier to trade.

60 Industrie 4.0 5 Recommended actions

Recommended actions

The regulatory challenges described above are not trivial and it will be essential to find solutions to them if the Industrie 4.0 initiative is to succeed. For the most part, these “solutions” will not entail legislation, but will instead require a mix of instruments comprising regulatory, technical and policy elements. Moreover, it will be important to raise awareness of the problems outlined above among SMEs by engaging professional associations and government ministries to act as multipliers.

One aspect that will be especially important for SMEs is the development of practical guidelines, checklists and model contract clauses. New contract models need to guarantee protection of business and trade secrets on the one hand, whilst also ensuring that any value-added generated through the new business models is shared out fairly. It will therefore be necessary to define the roles of the various partners as precisely as possible (including new roles such as different types of information broker).

As far as liability is concerned, the support provided should focus on data security and the requirement to provide documentary evidence, particularly at critical points where items are handed over from one partner to another. As for employee data protection, best practice models containing sample company agreements should be developed in order to ensure that the requirements of Industrie 4.0 do not encroach upon employees’ data protection rights. With regard to the secure and confidential handling of sensitive corporate data belonging to third parties, it would be desirable to engage in efforts to promote self-regulation through measures such as audits or certification of compliance with IT security standards. Nonetheless, it will still be necessary to legislate on certain issues. These include outsourcing of data processing activities, although it is at EU level that the need for legislation in this area currently exists.

There is also an urgent need for harmonisation in the field of trade restrictions, especially with regard to encryption products. In order to ensure that Germany can successfully sustain a position as a leading supplier for Industrie 4.0, efforts should be undertaken in the medium to long term to promote common international regulations, for example through the World Trade Organization.

In more general terms, the challenges posed by Industrie 4.0 in the areas where technology comes into contact with regulation will require interdisciplinary research. It will be important to ensure that legal experts are involved right from the earliest stages of the R&D process. By the same token, engineers will increasingly need to acquire a basic understanding of the legal issues so that they can engage in a full dialogue with their legal counterparts. A partnership along these lines between engineers and legal experts could provide Germany with a genuine competitive advantage in the Industrie 4.0 market. As such, it will be necessary for the Industrie 4.0 Platform to ensure that legal experts are involved in the various working groups from an early stage.

Industrie 4.0 61 5 Recommended actions 5.8 Resource efficiency

The nature of manufacturing industry means that it is by Challenges far the largest consumer of raw materials in industrialised In general terms, Industrie 4.0 will need to investigate nations. Together with the private sector, it is also the and implement ways of reducing the resources con- principal consumer of primary energy and electricity. In sumed during industrial manufacturing processes as a addition to the high costs involved, this situation entails whole and by the machinery and equipment used dur- risks to the environment and security of supply which ing production. The outcomes of the joint Federal Min- need to be minimised by regulation. Consequently, in- istry of Education and Research (BMBF) and German dustry is undertaking major efforts to reduce its con- Engineering Federation (VDMA) “Efficiency Factory” sumption of energy and resources or find alternative (Effizienzfabrik)13 initiative could serve as a model in sources. However, these efforts will need to be sus- this regard. When implementing efficient manufactur- tained over many years if they are to have any chance of ing processes it is important to consider not only basic succeeding. Ultimately, this will involve changes in manu- functions but also the stability of the processes under facturing processes and the design of machinery and dynamic conditions, such as frequent stopping and plant, since these are the only areas where material and starting and prevention of faulty products (which are a energy consumption can really be influenced. waste of materials and energy). The starting point is the amount of resources that are It is therefore necessary to consider productivity in used by manufacturing companies, both within the com- terms of preventing unstable processes that result in pany itself and throughout the rest of the value network. quality issues which in turn require the product to be It is possible to draw a distinction between three catego- repaired or completely remade. Availability also needs ries of resources and how they are used: to be considered. Manufacturing equipment can break down (so it is important to build in redundancies to 1. Raw materials, additives, operating supplies and all minimise the risk of failure), resources may not be read- the different kinds of energy carriers, including con- ily available when needed and inventory levels may not version from one type of energy into another be in line with requirements (semi-finished and finished 2. Human resources, i.e. human labour goods). 3. Financial resources, i.e. the necessary investment and operating costs One of the key challenges for Industrie 4.0 will be to demonstrate that the additional resources invested in In terms of how these resources are used, it is possible the deployment of CPS and the associated infrastruc- to focus on maximising the output achieved with a given ture can generate sufficient opportunities to deliver re- quantity of resources, or on using the lowest possible source productivity and efficiency gains based on the quantity of resources to achieve a given output. In the total amount of resources used during engineering, first scenario, the emphasis is on calculating resource manufacturing, production control, intralogistics, pro- productivity, whilst in the second scenario the focus is curement and distribution logistics. on calculating resource efficiency. A range of metrics Industrie 4.0 provides the opportunity to optimise deliv- are now available to perform these measurements (Life ery of the overarching goals of resource productivity Cycle Assessments, carbon footprinting12, etc). and efficiency on a case-by-case basis.

62 Industrie 4.0 5 Recommended actions

Recommended actions

The Industrie 4.0 Working Group recommends that a Working Group should be established through the In- dustrie 4.0 Platform to deal exclusively with the topic of resource productivity and efficiency. The Working Group’s remit should include the following tasks:

• Adoption and development of the outcomes of the BMBF/VDMA “Efficiency Factory” initiative. • Demonstration of resource savings in terms of enhanced resource productivity and efficiency in the manufacturing environment based on the avoidance of substitution processes resulting from productivity or availability issues. • Calculation and assessment of trade-offs between the additional resources required to deploy CPS and their associated infrastructure and the potential savings generated. This should also be done for the different categories of resources when it comes to taking decisions on modernising production lines or building new ones and the type of automation equipment required. These assessments should take account of the industry or sector in question and whether the value network is regional or global in scope. • It will be necessary to take account of the various metrics and KPIs (key performance indicators) that are being used to assess resource productivity and efficiency and eco-friendliness in current projects and initiatives. The development of decision-supporting KPIs such as the Green Production Index should also be taken into account, together with the basic data required to take transparent, resource-oriented investment decisions, particularly in the area of industrial automation.

1 Models can address a very wide variety of real or hypothetical scenarios, for example technological 10 The RAN (RFID-Based Automotive Network) project is one of 14 projects under the auspices of the systems such as products, manufacturing resources or entire manufacturing systems, living things, e.g. Federal Ministry of Economics and Technology’s “AUTONOMICS: Autonomous, simulation-based systems human behaviour or biological interactions, physical or chemical interactions and effects or organisations, for small and medium-sized enterprises” technology programme. RAN aims to deliver transparent and e.g. organisational structures and business processes or flows. optimal process control in the automotive industry. The project is investigating new approaches and 2 Avionics (a term derived from the words “aviation” – from the Latin avis, or bird – and “electronics”) methods for cost-effective inter-company management of order fulfilment processes. Workstream 3 is refers to all the electrical and electronic equipment on board an aircraft. developing a standardised IT infrastructure (“information broker”) enabling auto ID data to be exchanged 3 The following quotation is taken from: Arbeitsgruppe 2 des Nationalen IT Gipfels (Ed.): Digitale Infrastruk- between different companies so that they can be used to improve business processes. More information turen. Jahrbuch 2011/2012, 2012, pp. 176-177. is available at: www.autoran.de. 4 Examples of these regulations include the European Machinery Directive 2006/42/EG and its German 11 The term “dual use goods” is used, particularly in the field of export control, to describe goods that transposition in the shape of the Ninth Regulation of the Equipment and Product Safety Act, 9. ProdSV. may be used for more than one purpose (e.g. machines, software or technologies). Although these 5 The first programmable logic controller (Modicon 084) was deployed in manufacturing in 1969, see goods may have been produced primarily for civilian applications, their properties (e.g. the materials Chapter 1. they contain or their performance specifications) mean that they can also be used for military purposes. 6 BSI Cyber-Security Analyses, BSI-A-CS 004, Version 1.00, 12.4.2012. 12 Life Cycle Assessments (LCAs) involve a comprehensive analysis of a product’s total impact on the 7 According to the latest survey carried out by the German Engineering Federation (VDMA), Germany’s environment (including anything extracted from the environment for their manufacture, such as ores or machinery and plant manufacturing sector lost just under 8 billion euros worth of sales to piracy in 2011, crude oil, and any substances released into the environment, such as waste or CO2 emissions) through- a rise of 24 percent since the last survey two years ago. If the money lost in this way could be recuper- out the course of its entire life cycle, including its manufacture, use and subsequent disposal, as well ated, it would be enough to pay for 37,000 jobs in the industry. Almost two thirds of the companies that as the associated upstream and downstream processes (e.g. production of the relevant raw materials, participated in the survey are now affected by product piracy, rising to 93% for companies with more additives and fuels; see also ISO standards 14040 and 14044). LCAs can be used during the product than 1,000 employees which are generally the companies that are most active internationally (see VDMA: planning and design phases in order to ensure that the product is designed to be sustainable, as well Studie der Arbeitsgemeinschaft Produkt- und Know-how-Schutz, Produktpiraterie 2012, November 2012). as to help formulate product declarations during the marketing phase and for re-design purposes. A 8 See Tanja Fondel/Jochen Schroth: Innovationsführerschaft durch Mitbestimmung? In: Martin Allespach/ product’s carbon footprint refers to its total greenhouse gas emissions throughout its entire life cycle. In Astrid Ziegler (Ed.): Zukunft des Industriestandortes Deutschland 2020, Marburg, 2012, pp. 174-192. other words, this indicator narrows the scope of LCAs down to a product’s impact on climate change. 9 The German Qualifications Framework (DQR) establishes eight skill levels based on the complexity of 13 The joint BMBF (Federal Ministry of Education and Research) and VDMA (German Engineering Federa- the task and domain and the extent to which independent decision-taking is involved. According to the tion) “Efficiency Factory” innovation platform disseminates the research findings of the 31 projects industry’s professional associations and trade union, “skills” are defined as “the individual ability to grouped together under the BMBF funding priority “Resource Efficiency in Manufacturing”. The platform act independently in current and future open-ended and complex situations”, in: BITKOM, Gesamtmet- focuses on analysing trends across the different individual projects in order to enable the development all, VDMA, ZVEI (Ed.): Die Anforderungen des Beschäftigungssystems. Ein Beitrag zur Gestaltung des of integrated solutions for resource-efficient manufacturing that can subsequently be made available to Deutschen Qualifikationsrahmens, 2007, p. 10. interested companies. More information is available online at: www.effizienzfabrik.de.

Industrie 4.0 63 EXAMPLE APPLICATION 3: Supporting custom manufacturing: how an individual customer’s requirements can be met

The dynamic value chains of Industrie 4.0 enable customer- and product-specific coordination of design, configuration, ordering, planning, production and logistics. This also provides the opportunity to incorporate last-minute requests for changes immediately prior to or even during production.

Today Today’s automotive industry is characterised by static Rigidly sequenced car manufacture production lines (with predefined sequences) which on a production line are hard to reconfigure to make new product variants. Rigidly sequenced car manufacture Software-supported Manufacturing Execution Systems on a production line (MES) are normally designed with narrowly defined Workstation 1 Workstation 2 Workstation 3 Workstation 4 functionality based on the production line’s hardware and are therefore equally static. Workstation 1 Workstation 2 Workstation 3 Workstation 4 The nature of employees’ work is also determined by the production line’s functionality and is thus usually very monotonous. Individuality is not encouraged. As a result, it is not possible to incorporate individual customer requests to include an element from another Source: Hewlett-Packard 2013 product group made by the same company, for example to fit a Volkswagen with Porsche seats. Source: Hewlett-Packard 2013 TomorrowDecoupled, fully flexible and highly integrated manufacturing systems Industrie 4.0 results in the emergence of dynamic pro- Decoupled, fully flexible and highly duction lines. Vehicles become smart products that integrated manufacturing systems move autonomously through the assembly shop from Workstation A Workstation T Workstation O one CPS-enabled processing module to another. The dynamic reconfiguration of production lines makes it Workstation A Workstation T Workstation O possible to mix and match the equipment with which Workstation X Workstation H vehicles are fitted; furthermore, individual variations (e.g. fitting a seat from another vehicle series) can be Workstation X Workstation H implemented at any time in response to logistical is- Workstation F Workstation K sues (such as bottlenecks) without being constrained by centrally prescribed timings. It is simple to execute this type of reconfiguration and the cars move autono- Workstation F Workstation K Source: Hewlett-Packard 2013 mously to the relevant workstation. The Manufacturing Execution System IT solution now constitutes a central component from start to finish – from design through to Source: Hewlett-Packard 2013 assembly and operation.

POTENTIAL BENEFITS The first apps, MOS solutions and shared IT platforms as described above will start to appear relatively soon, i.e. within the next few months. However, it will be some years before we see end-to-end, CPS-enabled dynamic production 64 Industrie 4.0 lines. Nonetheless, implementations focused on specific parts of the manufacturing process can be expected to occur somewhat earlier. EXAMPLE APPLICATION 4: Telepresence

Remote Service is an instrument that manufacturers have been using for several years in order to provide customers with fast and efficient support by remotely accessing and controlling machines. Increased networking of manufacturing systems opens up new potential to deliver additional productivity gains.

Today Remote Service is enabled by the establishment of individual communication solutions between the machine supplier and the user. The technician generally connects to the machine directly via a modem. Since Remote Service the advent of the Internet, VPN connections (Virtual Private Networks) have also gained in popularity, since they allow secure access to the customer’s corporate network. The goal of this approach is to remotely diagnose and control the machine in order to Source: Trumpf 2013 reduce the duration of unscheduled stoppages and downtime. The configuration and administration of the communication links involves Remotea significant Service amount of management work, since the conditions of use need to be agreed separately with each customer. Moreover, this approach can currently only be used to provide reactive services, i.e. to carry out maintenance after an incident has occurred.

Source: Trumpf 2013 Telepresence Tomorrow In Industrie 4.0, technicians will no longer manually con- platform nect to the machine they are servicing. Manufacturing Source: Trumpf 2013 systems will operate as “social machines” – in networks that are similar to social networks – and will automatically connect to cloud-based telepresence platforms in order to search for the appropriate experts to deal with the situation in question. The experts will then be able to Telepresence use integrated knowledge platforms, videoconferencing platform tools and enhanced engineering methods to perform tra- Source: Trumpf 2013 ditional remote maintenance services more efficiently via mobile devices. Moreover, machines will continuously enhance and expand their own capabilities as the situation requires by automatically updating or loading the relevant functions and data via standardised, secure communication links with the telepresence platforms. By shifting complex computational tasks (e.g. simulations and projections) away from the machines to the portals it will be possible to employ huge amounts of processing power to ensure that they are performed in the shortest possible time, thus delivering additional productivity gains.

POTENTIAL BENEFITS The first cloud-based telepresence portals that have recently become available hint at what may be possible in the future. Rapid development of these portals will open up new horizons, revolutionising manufacturing systems over the next few years. 6 How does Germany compare with the rest of the world? 6 International comparison 6 How does Germany compare with the rest of the world?

Germany is not the only country to have identified the tion to create smart manufacturing systems, whereas trend towards using the Internet of Things in manufactur- the equally fashionable term “Advanced Manufactur- ing (Industrial Internet1) and its disruptive impact on in- ing” embraces a broader spectrum of modernisation dustrial processes as strategic challenges for manufac- trends in the manufacturing environment.6 turing industry going forward. However, a variety of As far as the global markets for machinery and plant different terms are used around the world to describe manufacturing, electrical engineering, automation and the phenomenon of Industrie 4.0. Especially in the Eng- ICT are concerned, the examples of selected countries lish-speaking world and at EU level, it is customary to serve to illustrate different policy responses to these refer to the Internet of Things and the trend towards trends. digitalisation in terms of a third Industrial Revolution. This number is arrived at either by including the second In- International market trends dustrial Revolution (the establishment of mechanical Following a period of spectacular growth between mass production) as part of the first,2 or not counting the 2004 and 2008, when output rose by approximately third transformation of industry resulting from the auto- 38 percent, the global financial crisis triggered a dra- mation of manufacturing processes as a genuine revolu- matic slump in orders and production among Germa- tion in its own right.3, 4 ny’s machinery and plant manufacturers. However, business started to pick up again as early as the middle The terms “Smart Production”, “Smart Manufacturing” of 2009 as companies strove to make up the ground or “Smart Factory” are used in Europe, China and the lost during the crisis. Demand has now returned to nor- US5 to refer specifically to digital networking of produc- mal, with two percent growth forecast for 2013.

Figure 13: Mechanical engineering in billions of euros 800 industry sales in selected countries* 700

600 EU (27) 500 Germany China USA 400 Russia

300

200

100

0 2006 2007 2008 2009 2010 2011 * Mechanical engineering industry not including services such as installation, repair and maintenance; as far as possible, the sales figures include all the companies that manufacture in the respective countries Source: VDMA, Stand November 2012

Industrie 4.0 67 6 International comparison » During the course of our work together it has become apparent that Germany pos- sesses all the necessary competencies in the fields of manufacturing technology and mechanical engineering to continue to enjoy global success in tomorrow’s world of the Internet of Things and Services « Dr. Siegfried Dais Robert Bosch GmbH Co-Chair of the Industrie 4.0 Working Group

According to a recent survey by the German Engineer- been quick to seize on terms such as “reshoring”9 and ing Federation (VDMA), the majority of German me- “insourcing boom”10 to describe what it already per- chanical engineering firms still see themselves as ceives as a fundamental sea change. among the world’s leaders and regard their main competitors as domestic ones, followed only distantly by China is also devoting a huge amount of effort to catch- competitors from the US and Italy. Global sales in the ing up with other countries in terms of its mechanical mechanical engineering sector came to around 2.1 tril- engineering technology and strengthening its market po- lion euros in 2011. A glance at the position of the me- sition. Over the past five years, it has risen to become the chanical engineering industry in selected countries re- world’s largest machinery manufacturer, with sales of veals an extremely heterogeneous picture. (see also 563 billion euros in 2011. At the same time, China has Fig. 13). also redoubled its efforts on the exports front. In 2011, the Chinese investment goods industry exported goods Since 2002, large-scale transfers of production to worth 87.7 billion euros, an increase of more than 20 other parts of the world have resulted in a sharp in- percent compared to the previous year. It thus leapt for- crease in the US mechanical engineering sector’s de- ward to become the world’s fourth largest exporter of pendency on imports. The number of people employed machinery, with a 10.2 percent share of the market. in the industry fell by 25 percent between 2002 and There has been a pronounced rise in Russia’s demand 2010.8 However, there have been some signs of a for machinery and plant since 2010. Russia, which is gradual recovery since 2010, with rises in both do- the official partner country of this year’s Hannover mestic and export demand. The press in the US has trade fair, is already the fourth largest export market

68 Industrie 4.0 6 International comparison for German mechanical engineering firms, behind Chi- The global turnover of the ICT industry is forecast to na, the US and France. Germany is also Russia’s rise by 4.6 percent this year to 2.69 trillion euros. At 5.2 number one machinery supplier, with a 22.6 percent and 4.2 percent respectively, the two key segments of market share. The Russian government is forecasting information technology and telecommunications are continued growth of the Russian market over the next both experiencing strong growth. However, there are few years and is supporting this growth through a significant disparities in market trends across different funding programme worth billions of euros. In the regions. Whilst the industry is booming in newly-indus- longer term, there is significant potential for German trialised countries, throughout most of Western Europe machinery and plant manufacturers to export Industrie it is either flat or in decline. Between them, China, India 4.0 products to Russia. and Russia already account for one seventh (14 per- In 2011, the global electrical engineering market was cent) of global ICT demand this year. The Chinese mar- worth 3,414 billion euros. At 116 billion euros, the Ger- ket alone is forecast to grow by 6.6 percent to 235 man electrical engineering market is the fifth largest billion euros in 2013, overtaking Japan (221 billion eu- in the world, after China (1,119 billion euros), the US ros) as the world’s second largest ICT market. The US (486 billion euros), Japan (284 billion euros) and South market remains the undisputed leader in terms of de- Korea (155 billion euros). In recent years, the growth of mand for ICT. The latest figures put its total value at the global electrical engineering market has largely 725 billion euros, an increase of 5.8 percent. Growth in been due to newly-industrialised countries whose total western Europe has been more sluggish than in the market volume of 1.7 trillion euros reached the same rest of the world. In 2013, ICT sales are expected to level as that of the industrialised nations for the first time rise by a modest 1.3 percent to 625 billion euros. The in 2011. It is expected that growth will remain signifi- German information technology market, on the other cantly higher in the newly-industrialised countries than hand, is forecast to grow by 3.0 percent in 2013 to 75 in the industrialised nations during 2012 and 2013. billion euros. Germany’s software market is also set to The global automation market recently reached 350 experience strong growth, rising by 5.1 percent to 17.8 billion euros, meaning that it now accounts for more billion euros. The market for IT services such as out- than one tenth of the global electrical engineering mar- sourcing and maintenance is forecast to grow by 3.0 ket. In the past few years, China has risen to become percent to 35.9 billion euros, whilst the hardware mar- the single largest regional market. Its market is current- ket is expected to return a modest growth figure of 1.2 ly worth 100 billion euros, giving it a 29 percent share percent. of the global market and meaning that it has now over- With SAP, Software AG and Telekom, together with taken Europe, where the market is worth just 93 billion major subsidiaries of US (e.g. IBM and HP) and Asian euros. Trailing some way behind these two markets are companies, Germany has a globally significant level of the US (12 percent or 40 billion euros) and Japan (8 IT competencies clustered closely together. This pro- percent or 26 billion euros). At 21 billion euros (6 per- vides a new opportunity for Germany to take a leading cent), Germany is the world’s fourth largest market. role in Industrie 4.0. China’s lead is even greater when it comes to automation product manufacturing. China accounts for 30 Industrial policy funding initiatives in selected countries percent of global production, or 103 billion euros out of Other countries are also supporting the modernisation a total of 350 billion euros. The US and Japan are more of manufacturing industry through funding programmes or less tied for second place with roughly eleven per- and research initiatives. However, the available informa- cent each, closely followed by Germany, with ten per- tion suggests that in the US and China, for example, cent. However, Germany is the world’s largest exporter the transformation envisaged by the Industrie 4.0 initia- of automation products and systems (29 billion euros), tive is regarded as no more than one trend among followed by China (27 billion euros) and the US (21 many, for example the introduction of new materials billion euros). and technologies.11

Industrie 4.0 69 6 International comparison US

The US administration has once again started to attach CPS and the Internet of Things (IOT) have already greater priority to the mechanical engineering sec- been benefiting from public funding in the US for sev- tor.12 It is now seeking to pursue an active industrial eral years. Indeed, Cyber-Physical Systems were iden- policy in order to create jobs and encourage reshoring tified as a key research area by the National Science of manufacturing to the US. In the summer of 2011, Foundation (NSF) as long ago as 2006. However, very President Obama launched the Advanced Manufactur- little is actually being done with regard to the specific ing Partnership (AMP), a private-sector led body that use of CPS in manufacturing.16 The Networking and In- brings together representatives of the research, busi- formation Technology Research and Development (NI- ness and political communities to chart a “course for TRD) Programme brings together 18 research agen- investing and furthering the development of the emerg- cies in order to coordinate research in different IT ing technologies”. The AMP Steering Committee is domains including Human-Computer Interaction and made up of the Presidents of the top engineering uni- Information Management. In 2011, the NITRD had a versities (MIT, UC Berkeley, Stanford, CMU, Michigan budget of over 3 billion dollars at its disposal. and GIT) and the CEOs of leading US enterprises (including Caterpillar, Corning, Dow Chemical, Ford, Hon- China eywell, Intel, Johnson & Johnson, Northrop Grumman, Procter & Gamble and United Technologies). China is also striving to expand its mechanical engi- In July 2012, the AMP submitted a report detailing 16 neering industry. The 12th Five-Year Plan (2011-2015) recommendations13 which include the establishment of a sets out the aim of reducing dependency on foreign National Network of Manufacturing Innovation Institutes technology and pursuing global technology leadership (NNMII). These institutes, which take the form of Public- in seven “strategic industries” including High-End Private Partnerships, are intended to act as “regional Equipment Manufacturing and a New-Generation Infor- hubs for manufacturing excellence” in order to improve mation Technology17. China’s leaders are making a total the global competitiveness of US businesses and in- of 1.2 trillion euros available for this goal up to 2015 crease investment in US manufacturing facilities. 14 and are stimulating supply and demand through subsi- In addition, the Obama administration is making more dies, tax breaks and other financial incentives. They R&D funding available for manufacturing research. In also intend to increase R&D investment as a proportion the 2013 budget, the funding earmarked for advanced of GDP from 1.5 to 2 percent by 2015.18 In the ma- manufacturing is being increased by 19 percent to 2.2 chine tools sector, one of the priorities is the develop- billion dollars. On top of this, the National Institute of ment of “intelligent manufacturing equipment”, “intelli- Standards and Technology (NIST), which is the body gent control systems” and “high-class numerically responsible for standardisation, has been allocated controlled machines”, whilst the priorities in the area of 100 million dollars of funding to provide technical sup- IT include the Internet of Things and its applications, port to domestic manufacturing industry through the including “industrial control and automation”. provision of research facilities and know-how. NIST is Since 2010, the priority attached by Beijing to the In- also responsible for the Advanced Manufacturing Por- ternet of Things has grown significantly.19 China has tal15 which was set up at the AMP’s recommendation held an annual Internet of Things Conference since and is intended to facilitate networking between gov- 2010 and China’s first IoT Center was opened during ernment, university and private initiatives in this field. the first of these conferences. This research centre has Finally, the US administration’s Jobs and Innovation Ac- received 117 million US dollars worth of funding to in- celerator Challenge initiative is investing 20 million dol- vestigate basic IoT technologies and the associated lars in a further ten Public-Private Partnerships in the standardisation requirements. In addition, the School of field of advanced manufacturing. Software at Dalian University of Technology established

70 Industrie 4.0 6 International comparison a research group as long ago as 2009 with a remit that ly submitted its “Vision for Manufacturing 2.0”, that is includes the investigation of CPS applications in auto- intended to serve as a discussion document for future mation engineering. 20 China has also established an research funding initiatives under the Eighth Frame- “IoT innovation zone” in the city of Wuxi in Jiangsu Prov- work Programme for Research – “Horizon 2020” ince with 300 companies employing more than 70,000 (2014-2020). Horizon 2020’s proposed budget of 80 people. China’s leaders are planning to invest a total of billion euros will make it the world’s largest R&D fund- 800 million US dollars in the IoT industry between now ing programme.23 and 2015.21

EU India

At EU level, research into the Internet of Things is cur- Innovation funding is one of the core priorities of In- rently benefiting from increased support through the dia’s Five-Year Plan (2012-2017) which provides for an Seventh Framework Programme for Research (2007- increase in public and private R&D investment to two 2013). The largest budgetary allocation of in excess of percent of GDP.24 In 2011, the “Cyber-Physical Sys- 9 billion euros is earmarked for the ICT funding priority. tems Innovation Hub” project was launched under the Within the programme, there are a variety of cross-bor- auspices of the Ministry of Communications and Infor- der initiatives geared towards implementing the Inter- mation Technology to conduct research into a variety of net of Things in manufacturing industry. The Sie- areas, including humanoid robotics. Moreover, Bosch mens-led “IoT@Work” project has been given a budget founded the Centre for Research in CPS in Bangalore of 5.8 million euros to develop the Plug&Work concept in November 2011. Both the Fraunhofer-Gesellschaft in a practical setting. Meanwhile, a total of 2.4 billion and several top Indian research centres are participat- euros has been invested in the ARTEMIS technology ing in this project in an advisory capacity. The partner- platform to promote R&D projects in eight sub-pro- ship, which is funded to the tune of 22.8 billion euros, grammes that include both “Manufacturing and Pro- aims to create an optimal research and working envi- duction Automation” and CPS.22 In addition, 1.2 billion ronment for the IT specialists of the future. In future, euros have been awarded to the Public-Private Partner- support will also be provided to industry and the re- ship initiative “Factories of the Future” which launches search community, for example through research con- annual calls for proposals for projects in the area of tracts.25 Even today, according to a recent study by the smart, ICT-driven manufacturing. Under the auspices of Zebra Tech Company, Indian businesses are world this initiative, the SAP-led project “ActionPlanT” recent- leaders in terms of take-up and use of IoT technology.26

Industrie 4.0 71 6 International comparison

TAKE-HOME MESSAGE

Many of Germany’s competitors have also recognised the trend for using the Internet of Things in the manufacturing environment and are promoting it through a range of institutional and financial measures. The Industrie 4.0 Working Group believes that Germany is well placed to become a global pacesetter in the area of Industrie 4.0. The Industrie 4.0 Platform should undertake regular critical appraisals of the extent to which the measures implemented and planned by Germany are succeeding in delivering this goal.

A separate research project should be established to carry out a more detailed analysis of Germany’s international competitors and the markets it should be targeting over the next ten to 15 years.

1 At the end of 2012, US-based company General Electric (GE) publicly launched a broad-based initiative 11 See, for example, McKinsey Global Institute: Manufacturing the future: The next era of global growth focused on the Internet of Things (IoT). Although GE’s “Industrial Internet” strategy has applications in a and innovation, November 2012. huge variety of different areas, manufacturing only plays a minor role. GE believes that there is potential 12 This is at least partly in response to calls made by the Association for Manufacturing Technology and to deliver significant global savings through deployment of the IoT in a range of different industries. the recommendations of the President’s Council of Advisors on Science and Technology (PCAST). In its It calculates that fuel consumption in the commercial air travel sector could be cut by 1 percent over 2012 report on “Capturing Domestic Competitive Advantage in Advanced Manufacturing”, PCAST, which 15 years, generating savings of 30 billion dollars, whilst efficiency gains in the healthcare and freight advises the US administration, argued that the US is losing its position as a leading manufacturing and rail transport industries could save 66 billion and 27 billion dollars respectively. (See Evans, Peter nation and, unlike other industrialised nations, is doing hardly anything about it at a policy level. C./Annunziata, Marco: Industrial Internet. Pushing the Boundaries of Minds and Machine (GE Study), 13 PCAST: Capturing Domestic Competitive Advantage in Advanced Manufacturing. AMP Steering Commit- November 2012, p. 4) tee Report, July 2012; see also National Science and Technology Council (NSTC): National Strategic Plan 2 For details on how this term is used, see e.g. Evans, Peter C./Annunziata, Marco: Industrial Internet. for Advanced Manufacturing, February 2012. Pushing the Boundaries of Minds and Machine (GE study), November 2012, p. 7f. 14 The network is currently under development. Funding from a number of US State administrations and 3 This is the reasoning underpinning the statement made by the European Commissioner for Industry and businesses will be complemented by a one billion dollar investment on behalf of central government. Entrepreneurship, Antonio Tajani, when he proclaimed a third Industrial Revolution in May 2012 (see The aim is to establish a total of 15 research institutes that will focus on different aspects of advanced European Commission: Building a New Industrial Revolution in Europe. In: Unternehmen und Industrie manufacturing. This is intended to improve coordination between university research and product de- Magazin, June 2012.). A few months later, following a public consultation, Tajani identified six key areas velopment within enterprises (see also Appendix 1: Technology Development Workstream Report, in: that should be strengthened in the future by the EU, the member states and private actors. Two of these PCAST: Capturing Domestic Competitive Advantage in Advanced Manufacturing. AMP Steering Commit- areas are directly relevant to Industrie 4.0: the promotion of “advanced manufacturing technologies” and tee Report, July 2012). “key enabling technologies” (see European Commission: Industrial revolution brings industry back to 15 Online at: www.manufacturing.gov. Europe (press release), 10 October 2012). 16 Of the 108 projects since 2008 that have received funding of between 500,000 and 1 million dollars, it 4 To some extent, the discourse surrounding the third Industrial Revolution is also connected with a new appears that only one is specifically focused on the use of CPS in manufacturing. innovation cycle characterised by the use and expansion of renewable energy (see e.g. Rifkin, Jeremy: 17 In these areas, the Plan speaks emphatically of “leapfrogging”. The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World, 18 This would bring China’s R&D expenditure up to around 215 billion euros by 2015, or roughly three times 2011), a dramatic increase in resource productivity and the use of new materials, substances and pro- the amount that Germany currently spends on research and development (see Nürnberg, Jörg/Wang, cesses (e.g. 3D printing; see Hill, Jürgen: Das Potential von 3D-Druck, in: Computerwoche, 29.01.2013). Thomas: Implications of the 12th Five Year Plan For German Machinery Manufacturers, April 2012). 5 See e.g. the blog smartmanufacturing.com or the initiative Smart Manufacturing Leadership Coalition 19 Since 2010, outgoing premier Wen Jiabao has set out the importance of the IoT as a key technology (SMLC), more information available online at www.smartmanufacturingcoalition.org. for China’s development in several speeches. The Minister of Industry and Information Technology, Li 6 Advanced manufacturing is a family of activities that depend on the use and coordination of information, Yizhong, also highlighted this topic in an article entitled “We must make use of information technology automation, computation, software, sensing, and networking, and/or make use of cutting edge materials to restructure and improve traditional industry; we should formulate policies to encourage the develop- and emerging capabilities enabled by the physical and biological sciences, for example nanotechnology, ment of Internet of Things” (see http://en.cbf.net.au/Item/639.aspx - last visited by the authors in chemistry, and biology. It involves both new ways to manufacture existing products, and the manufacture January 2013). of new products emerging from new advanced technologies.” This definition, which was produced by 20 See Geisberger, Eva/Broy, Manfred: agendaCPS. Integrierte Forschungsagenda Cyber-Physical Systems the President's Council of Advisors on Science and Technology (PCAST), one of the US administration’s (agendaCPS. Integrated Research Agenda Cyber-Physical Systems) (acatech STUDY), Heidelberg et al.: most important advisory committees on technology trends, is typical of how this particular term is used Springer Verlag 2012. (see PCAST: Report to the President on Ensuring American Leadership in Advanced Manufacturing, June 21 See Voigt, Kevin: China looks to lead the Internet of Things, (CNN), 28 November 2012. 2011, p. ii). 22 Since 2008, ARTEMIS has also been organising an annual worldwide “CPS week”. The European 7 A total of 483 companies participated in the VDMA survey (see VDMA: Tendenzbefragung. Internationale Research Cluster on the Internet of Things (IERC) is an initiative funded through the Seventh Framework Wettbewerbsposition des deutschen Maschinen- und Anlagebaus [Survey of Current Trends. Global Programme for Research which coordinates European research activities in this area. Competitive Position of German Machinery and Plant Manufacturers], October 2012). 23 In the UK, a group of experts is currently studying the future of manufacturing. “The Future of Manufac- 8 See Le Monde Diplomatique: Die Zukunft der Industrie liegt in Asien, in: Atlas der Globalisierung – Die turing” project will identify potential development strategies for manufacturing up to 2050. Welt von morgen, 2012, p. 28. 24 See Government of India, Planning Commission: Faster, Sustainable and More Inclusive Growth. An 9 See Minter, Steve: Evidence for U.S. Manufacturing Reshoring Builds. In: The Global Manufacturer, Approach to the Twelfth Five Year Plan, October 2011, p. 115. October 2012, and The Economist: Reshoring manufacturing. Coming home, Special Report, January 25 See Geisberger, Eva/Broy, Manfred: agendaCPS. Integrierte Forschungsagenda Cyber-Physical Systems 2012. (agendaCPS. Integrated Research Agenda Cyber-Physical Systems) (acatech STUDY), Heidelberg et al.: 10 See Fishman, Charles: The Insourcing Boom. The Atlantic, December 2012. Springer Verlag 2012. 26 See CXO today News Desk: Indian CIOs keen on adopting Internet of Things, 11 October 2012.

72 Industrie 4.0 EXAMPLE APPLICATION 5: Sudden change of supplier during production due to a crisis beyond the manufacturer’s control

Circumstances beyond the manufacturer’s control, such as unexpected natural disasters or political crises, mean that they often have to change suppliers suddenly during production. Industrie 4.0 can help to make these changes substantially smoother by running simulations of the affected downstream services, thus allowing different suppliers to be evaluated and the best alternative to be selected. Today In the event of unexpected supplier failure, it is currently difficult for manufacturers to assess the impact on current production and downstream processes and come up with a timely response. Sudden supplier failures result in significant additional costs and delays in production and thus entail major risks to companies’ business. They need to take quick decisions about which alternative supplier to use as cover, how to execute the logistics for goods that are currently in production, how long current stocks are likely to last, which products already contain components from the failed supplier and whether the alternative suppliers actually have the ability and skills needed to provide the required capacity by the relevant deadline. Currently, it is only possible to provide partial IT support for these decisions.

Tomorrow In Industrie 4.0 it will be possible to simulate all the steps in the manufacturing process and depict their influence on production. This will include simulation of inventory levels, transport and logistics, the ability to track the usage history of components that have already been used in production and provision of information relating to how long components can be kept before they expire. This will enable product-specific set-up costs to be calculated and reconfiguration of production resources to be kept to a minimum. It will also be possible to assess the relevant risks. It will thus be possible to simulate the different costs and margins of alternative suppliers, including simulation of the environmental impact associated with using one supplier over another. Extensive networking of manufacturing systems will make it possible to analyse alternative suppliers and their capacity in real time. It will be possible to contact and engage suppliers directly via the appropriate secure channels in the supplier cloud.

POTENTIAL BENEFITS IT innovations such as Big Data and the Cloud allow real-time optimised simulations to be performed. The necessary software designs already exist. The value drivers in favour of prompt implementation of this approach include time and cost savings and the ability to minimise risks to the business. 7 Outlook 7 Outlook 7 Outlook

Germany has the potential to become a leading market spread basis. At the same time, it will also be neces- and leading supplier for Industrie 4.0. If this is to be sary to research and develop innovative solutions for achieved then, in addition to meeting the technological new manufacturing sites and new markets. If this is challenges, it will be essential for the different industries done successfully, Germany will be in a position to be- and their employees to work together in order to shape come a leading supplier for Industrie 4.0. Moreover, the developments. The Industrie 4.0 Platform constitutes a establishment of a leading market will serve to make crucial step towards ensuring that the innovation poten- Germany a more attractive manufacturing location and tial of Industrie 4.0 is leveraged across all industries. help preserve its domestic manufacturing industry.

The journey towards implementing the Industrie 4.0 vi- The Industry-Science Research Alliance launched the sion will involve an evolutionary process that will pro- strategic initiative Industrie 4.0 in early 2011. As of gress at different rates in individual companies and April 2013, the industry’s professional associations sectors. Demonstration projects should therefore be BITKOM, VDMA and ZVEI will be joining together with developed and new products brought to market as actors from the business and research communities soon as possible. and civil society in order to ensure that implementation of the initiative is progressed in a coherent manner. A Implementation should be addressed through a dual systemic approach in which all the stakeholders are in- strategy. Existing basic technologies and experience volved in a mutual exchange of technological and social will need to be adapted to the requirements of manu- innovations will provide a sound basis for successful facturing engineering and rolled out rapidly on a wide- cooperation in this regard.

Industrie 4.0 75 The strategic initiative Industrie 4.0 Background The strategic initiative Industrie 4.0

Industrie 4.0 is a “strategic initiative” of the German Since 2006, the German government has been pursu- government that was adopted as part of the High-Tech ing a High-Tech Strategy geared towards interdepart- Strategy 2020 Action Plan in November 2011. It was mental coordination of research and innovation initia- launched in January 2011 by the COMMUNICATION tives in Germany with the aim of securing Germany’s Promoters Group of the Industry-Science Research Al- strong competitive position through technological in- liance (FU). Its initial implementation recommendations novation. The current incarnation is known as the were formulated by the Industrie 4.0 Working Group High-Tech Strategy 2020 and focuses on five priority between January and October 2012 under the coordi- areas: climate/energy, health/food, mobility, security nation of acatech –National Academy of Science and and communication. The strategy revolves around a Engineering. The Working Group was chaired by Dr number of “strategic initiatives” through which the In- Siegfried Dais, Deputy Chairman of the Board of Man- dustry-Science Research Alliance is addressing con- agement of Robert-Bosch GmbH, and Prof. Henning crete medium-term scientific and technological devel- Kagermann, President of acatech. The recommenda- opment goals over a period of ten to fifteen years. The tions were submitted as a report to the German govern- initiatives have formulated concrete innovation strate- ment at the Industry-Science Research Alliance’s Im- gies and implementation roadmaps designed to make plementation Forum held at the Produktionstechnisches Germany a leader in supplying solutions to global Zentrum Berlin on 2 October 2012. Going forward, challenges. further implementation measures will be progressed through a number of working groups under the Indus- This report presents and expands upon the recom- trie 4.0 Platform which was recently established by the mendations put forward by the Industrie 4.0 Working industry’s professional associations BITKOM, VDMA Group in October 2012 and will provide a basis for and ZVEI and which now has the support of its own the work of the Industrie 4.0 Platform that will com- Secretariat. mence in April 2013

Home page of the Industry-Science Research Alliance: forschungsunion.de

High-Tech Strategy Action Plan available at: bmbf.de/pub/HTS-Aktionsplan.pdf

Industrie 4.0 Working Group reports: acatech.de/industrie4.0

Industrie 4.0 77 Industrie 4.0 Platform The Industrie 4.0 Platform

The professional associations BITKOM, VDMA and The Secretariat is staffed by members of the three pro- ZVEI have established the joint Industrie 4.0 Platform in fessional associations and provides the Steering Com- order to progress the initiative and ensure a coordinat- mittee with organisational and administrative support. It ed, cross-sectoral approach. deals with knowledge transfer, internal relations and relations with similar initiatives. It is also responsible for The Platform’s central coordination and management media and public relations activities. body is the industry-led Steering Committee. It is responsible for setting the Platform’s strategic course, appointing working groups and guiding their work. The Steering Committee is supported by a Scientific Advi- Secretariat sory Committee that includes members from the man- Management: Rainer Glatz, VDMA ufacturing, IT and automation industries as well as a Dr. Bernhard Diegner, ZVEI number of other disciplines. The Working Groups re- Wolfgang Dorst, BITKOM port to the Steering Committee, but are free to determine their own structure. They are open to all interested Secretariat address: parties. Lyoner Straße 9, 60528 Frankfurt/Main

The Governing Board provides input with regard to Contact: strategy and supports the Platform’s political activities. [email protected] Where necessary, it represents the Platform vis-à-vis plattform-i40.de policymakers, the media and the public.

Figure 14: Provides input on Platform’s strategy sends one spokesperson Provisional Steering Committee (SC) organisational Governing Board (GB) • Member companies Scientific Advisory chart of the Board members from • Representatives of the 3 professional associations Committee (SAC) “Industry 4.0” Steering Committee’s • SAC spokesperson Professors from the Platform member companies • Guests: working group leaders relevant technical disciplines supports manages the platform in coordination with WG leaders supports supports Secretariat (Sec.) Run jointly by WG 1 WG 2 … WG n BITKOM, VDMA and ZVEI

informs communicates sends representatives Community of experts

78 Industrie 4.0